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Apple brand in China affected by trade war

UNITED STATES, WASHINGTON (OBSERVATORY) — Apple has lost its position in the top ranking of brands that Chinese users prefer. Experts attribute this to the ongoing trade war between the US and China.

The company dropped from 11th to 24th place in the annual ranking of China’s leading brands, Bloomberg reports citing data from a report by the consulting company Prophet. In 2017, before the outbreak of the trade war, Apple held 5th place in this ranking. Meanwhile, Apple’s largest local competitor, Huawei Technologies Co., climbed two places and took second, behind only the Chinese payment system Alipay.

As part of a study in which residents of major Chinese cities participated, experts rated 258 brands in 27 categories. 13,500 Chinese participated in the survey. Respondents evaluated the brands that they used or planned to use, evaluated their relevance to the lives of consumers on the basis of qualities such as innovation, usefulness and reliability.

The results showed that Chinese consumers have become colder with some American brands.

According to Jay Millikan, senior partner at Prophet, in Hong Kong, since the Trump administration banned US companies from cooperating with Huawei, Chinese consumers have begun to actively support domestic manufacturers.

Chinese buyers took what happened to Huawei as an act of aggression from the United States, and as a result, patriotic sentiment became the driver of popularity of Chinese brands, for example, sportswear manufacturer Li Ning Co. first entered the top 40, taking 34th place, losing only two places to market leader Nike Inc.

In the top ten this year, there were only two brands from the United States – Android and Intel, which took 3rd and 9th places, respectively. Millikan stressed that, unlike Apple, the company does not need to worry that the Chinese will turn their backs on them. “Some Western brands are so inseparable from the lives of Chinese consumers that they are almost prone to not lose their relevance. There are no Chinese alternatives, so they remain super-relevant,” said the Bloomberg interlocutor.

Bloomberg writes that geopolitical tensions are not Apple’s only problem in China, which is considered the company’s largest market after the United States. The fact is that smartphones from Apple, including the new iPhone 11, do not support the 5G format, the development of which the Chinese authorities are actively engaged.

Last month, US President Donald Trump called on Apple to leave China. “I can help American companies like Apple in a very short time, until they do what they have to do: probably leave China,” Trump said.

The American leader added that without his help, such corporations would have had big problems.

Analysts predicted Apple significant damage due to increased US import duties. Experts suggested that prices for apple products would rise by 20%. However, this did not happen: Apple did not raise prices for the new iPhone 11, and, according to analysts, the decision to lower the price was made just because of China, where Huawei and Xiaomi gadgets dominate.

The largest Chinese online store, Tmall, was the only third-party store that began accepting pre-orders for the new iPhone 11 in China, in addition to the official Apple store. According to representatives of the store, even before the official acceptance of pre-orders, more than 1 million users reserved one of the iPhone 11 models, leaving their contact details.

Most popular is the most affordable model from the new line – iPhone 11. The volume of reservation for this unit is 200% higher than the volume of pre-orders for last year’s iPhone XR.

Representatives of the store assure that the popularity of the gadget will not lead to delays in deliveries, since Apple took care of the availability of a sufficient number of smartphones by the time sales began. At the same time, the seller promises delivery of the iPhone 11 within an hour after the start of sales to users from Shanghai and Hanzhou.

Chinese consumers have to pay between 10.5% and 12.5% ​​more for the iPhone 11 according to CNBC. The cheapest model starts at 5,499 yuan ($ 777). This premium is less than last year’s iPhone XR – the equivalent of the new iPhone 11, which cost China 28% more than the US.

In the end, Apple was forced to lower iPhone prices in China for this series. But now at the start, cheaper prices for the iPhone 11 have aroused interest among Chinese consumers.

Chinese e-commerce company Fenqile and Apple’s authorized reseller told CNBC that of all the pre-ordered iPhone 11 devices, including Pro and Pro Max, 40% reserved a 128 GB iPhone 11 and 22% ordered a 64 GB iPhone 11. These are the two most cheap Apple models, which means that most pre-orders were made for the iPhone 11.

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