Even as anxiety about China’s perfect storm heightens, top smartphone companies are not holding back on their show of superiority. At the helm of this battle are Samsung, Apple and Microsoft Corp. respectively. Not only are these competing over market share but also in the search for modern technology, a fact that has seen an increasing number of gadgets released.
In 2016 alone Samsung expects to unveil at least three new devices, namely Galaxy 7, Galaxy Note 6 and Galaxy S7 Edge+. In the same year, we will also be seeing Apple iPhone7 and Apple iPhone 7 Plus come to the market for the first time, hopefully in September.
While Samsung gives Apple an edge in the world market, the situation is different in China where the latter rules. This has seen the California based company become a dominant reference point in the increasing discussions regarding the Chinese stock market trading.
Despite being the most popular smartphone manufacturer in China, at 24 percent rating followed by Samsung at 22 percent, there is still a rapidly growing demand for Apple products in the country. Over the weekend of September 2015 announcement of iPhone 6S and iPhone 6S Plus, the firm sold over 13 million units of the new gadgets.
According to a recent survey by Bank of America, 81 percent Chinese owning Apple devices intend to keep their gadgets or continue buying Apple products for the next year. The same report shows that 32 percent of people owning android gadgets intend to switch to Apple within a year.
Not so fast
Considering that 57 percent of all the 461 correspondents intend to buy a new device within the next year, the future looks bright for Apple, right? Probably not.
To begin with, Apples’ share prices started dropping rapidly in December 2015. On January 8th, Apple’s shares sold below $100 for the first time since 2008. It has picked up since then, but the staggering is still worrisome.
Secondly, Chinese mobile phone firms like Huawei and Xiaomi may soon be hot on the heels of Apple. In terms of mobile phone market trading, Huawei ranks fourth with a 5.7% world market share, just 0.6 percent behind Microsoft. Taking into account that handsets are the primary income earners for Apple, Huawei is a big threat as it has already dominated other appendages of the gadget market.
Third, being an outsider, Apple might get disadvantaged when the Chinese government scales up its efforts of protecting corporations. This might not be a very hard decision for China, considering that even its own citizens, though they have capital, are actively barred from investing some in ripe ventures in which parastatals engage.
The fourth and the scariest is the impending China stock market crash. This is not only a threat to Apple but also to other multinationals.
Countries are not spared. While emerging economies like Brazil are the ones that will bear the biggest brunt, even the US will feel a pinch; more goods from US today find their way into China than into Canada. This trend might not continue if China receives a hard landing.
What is it with China?
Since 2010, there have been very many predictions of China’s stock market crash with strong indicators to back them. For instance, it is no longer deniable that investors have put too much into the Chinese economy; the increasing number of empty office spaces in Beijing is just a tip of the iceberg.
In addition, despite the fact that financiers tightened their lending criteria and the central bank increasing its rates, a lot of debt still circulates within. Consumer spending is also at its highest.
Miraculously, the unavoidable storm has kept on postponing its visit. In fact, probably the worst is already happening if the allegations that the Chinese government is cooking its books are anything to go by. The 10 percent drop in United Technologies orders in 2015, despite promising market indicators, has given more weight to this suspicion.
With or without a foul play, the market can no longer continue evading fate; experts, including the World Bank and IMF, predict that 2016 is the strike year, and that if it misses, then 2017 is definitely the period when the world will relive experiences of 2009 or worse.
On the bright side
While focusing its market trading in China, Apple has worked hard to improve its grip in other parts of the world. There is also a wide market base for Apple gadgets in the US and UK. Moreover, the user rating has improved generally.
All factors constant, the company will actually remain strong in the face of the tough days ahead. As long as Apple continues to diversify its marketing, it still remains to be a reliable place to put your money.