Friday, September 27, 2013

Apple Will not Go for Broke in China

China becomes a preference in global marketing, as it is easy to refer to its steady growing economy. Global companies require such economies to survive. Its huge size and growth potential added to low investment in research and development means acquisitions, mergers and start up companies are inevitable. Research firm analysts estimates that total smartphone sales in China will reach 421 million units soon and Apple has only 5% of the market. Apple must change its strategy and enter into a business partnership with China Mobile -the country's largest carrier with more than 700 million users. Apple can cut a niche and reach the country's less-affluent customers, as well as high end users once it turns away from its defensible strategy of maintaining profit margins. Apple should also deal with the 17% value-added tax in China. Apple should device a way to enhance growth in China by offering subsidies, which is a defensive strategy, compared to going decisively in this market due to its fast falling share price.

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