Why it’s about to get tougher for Apple to grow iPhone sales in China

Samsung seems to be more likely to be affected by this move. iPhone’s will no doubt be impacted, however, given their “luxury” status it probably will pan out similarly as in other cases where subsidies were cut in certain countries.

Update: To be clear, Apple will likely lose market share over this – but their profit will likely not take as much of a hit. They’ve always sold less of their (typically one to three) models of iPhone vs. hundreds of models of other vendors’ phones and still made the lion’s share of the profit.


Like other handset makers, Apple has continuously said how important China is for its phone sales. Apple may have to rethink its handset strategy however, as the world’s largest carrier, China Mobile, is reducing the amount it spends to subsidize hardware by $2 billion this year. Bloomberg reported the news on Friday, noting that as of June, the carrier had a whopping 790.6 million subscribers.

Is this your new home hub?

Hardware subsidies paid by carriers help offset the high price of smartphones so by reducing this spend, lower-costing full price phones could be more attractive financially to a bigger group of consumers. [company]China Mobile[/company] customers therefore could gravitate towards cheaper Android phones instead of [company]Apple’s[/company] handset. Huawei, ZTE, Lenovo and Xiomi are all likely to benefit from this situation, as might Samsung to a degree since it does have low- to mid-priced phones on the market.

China Mobile made the decision to reduce subsidies…

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