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News item One: Apple’s WeChat Problem in China-
The huge popularity of the WeChat app means Chinese phone buyers can be less
loyal
Apple’s brand loyalty has been the key to its large market share. However, Apple has
met a challenge in China, the world’s biggest smartphone market, that it rarely faces
elsewhere—Chinese people are less afraid than most to ditch their iPhones.
The technology giant’s revenue in China fell 14% in the first quarter, its fifth
consecutive quarterly sales decline: China was the only region where Apple’s sales fell
last quarter. The lack of a new iPhone model explains some of the fall. The company
also faces strong domestic competition from Chinese brands like Huawei, Oppo and
Vivo, which together hold more than half of the market share.
But one key factor that’s often overlooked is customer loyalty. Apple’s success in most
countries is largely down to the way it locks users into the iOS operating ecosystem.
Anyone thinking of switching to a new Android-based handset has to ponder the hassle
of a new interface and setting up all their apps again. About 92% of iPhone owners in
the U.S. who consider buying a new phone are going to stay put, according to a recent
Morgan Stanley survey. That stickiness allows Apple to sell new iPhone models at a
premium.
In China, though, operating systems aren’t such a big deal, says Ben Thompson,
founder of research firm Stratechery. Instead WeChat, the ubiquitous social network
owned by Chinese tech giant Tencent, is crucial. The app, which began life as a
messaging tool and now has almost 1 billion active users, is effectively a mini-operating
system itself. Within it, users can do almost anything—download games, pay bills,
transfer money or order takeaways.
Crucially, WeChat is available on both iOS and Android. Its flexibility means it’s less
of a wrenc
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