The Apple Way to Succeed In China: They Did It Their/Our Way

I’m somewhat kidding with the title. Though I do have to admit one of the benefits of having blogged for so long is occasionally being able to write an ”I-told-you-so” post like this one.

Six years ago, when Apple was first getting started in China, a number of pundits wrote about why Apple was failing in China.

As a long time Apple shareholder and devotee, I immediately sided with Apple against the pundits and in The iPhone In China: Ain’t No Mountain High Enough, [link no longer exists] I called for patience:

Let me start out by stating as clearly as possible that I do NOT think Apple is failing in China. I do not know exactly how well or how poorly it is actually doing there, but the reason I am certain it is not failing is because it has not been there nearly long enough for anyone to say it has failed, or even that it is failing. Apple is a big company and I am quite certain it plans on being in China for the long haul and until the long haul is over, one cannot ascribe failure to it. Apple is still in the “getting its feet wet” stage in China and it is not fair to pass anything close to final judgment on it until it has gotten well past this stage. I again urge everyone to read the book, Chocolate Fortunes, to better understand how it can take a long time and a lot of money for a big company to establish a consumer foothold in China. Let’s just say Apple’s conduct in China has not caused me to even think about selling even one share of my stock.

Then, in response to a slew of comments and emails criticizing Apple in China, I wrote another “Apple will do just fine” piece, Apple In China (Again) And Why SMEs Usually Do Better Faster, [link no longer exists] in which I again pleaded for calm:

I wrote an article on Apple’s alleged iPhone failure in China. I say “alleged,” because though iPhone sales have not soared in China, I remain confident Apple will do just fine there.

After that article ran, I received a couple emails with “inside knowledge” of how Apple is messing up in China, largely because it is trying to do things “its way” in China, rather than the “Chinese way.”

And though those who emailed are probably right to say Apple has so far not done as well as expected in China, even as a shareholder, I say (in the largest font I can muster), SO WHAT.

I then went on to explain how large companies that go into China invariably start out slowly as they gain a lay of the land.

I defended Apple for a third time in Explanations For Apple’s China Success [link no longer exists]:

Here’s my own explanation. Apple stuck to its knitting.

Just about whenever I speak on China I am asked what it takes to succeed in business in China. In my response, I always  emphasize the need to stick to your business’s already established principles. To me the key explanations for Apple’s success are how Apple refused to go into China with its iPhone unless it would be free to make it a real iPhone in China, just like everywhere else and on how Apple waited until China’s consumers could afford its products, rather than giving them a cheap substitute in the meantime.

I am not saying companies should never create products just for China (because in many cases, they should), but I am saying companies that bend so far as to lose sight of who they really are, are not likely to succeed.

China business consultants have a vested interest in fanning the belief that China is totally different than anywhere else in the world and their peculiar China expertise is essential to assist Western companies in navigating China’s market shoals. The typical Western company is often of the view that “this is what we know and this is how we have succeeded in the past, and we are not going to change for anyone.” The trick is in balancing between what you know and localizing. This is never easy because the right balance varies between companies, products and countries (really even regions within countries).

I have long endorsed Apple’s China strategy (which is not much more than one part of its global strategy) and I still do. I am just glad Apple has been listening — that’s a joke!

What do you think?

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