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Spendthrift Chinese tourists show tax is economy’s real problem

48 0 26
12.01.2019

This year marks the 10th anniversary of the official launch of Apple’s iPhones in China, but it seems like only yesterday the wildly popular smartphones with their revolutionary designs and innovative features caught the imagination of Chinese consumers.

In the early years, overnight queues formed every time an upgraded model was launched, with the product’s appeal illustrated by reports that some muddle-headed youth had sold their kidneys to get their hands on one.

Ten years on from those heady days, the announcement by Apple CEO Tim Cook this month that his company would slash its quarterly revenue forecast for the first time in 15 years – blaming China’s economic deceleration – has rattled world markets and dragged down tech stocks.

For investors looking for signs of China’s slowing economy and falling consumer confidence, Cook’s warning could not be more definitive.

But laying the blame for Apple’s woes squarely on the Chinese economy is misleading.

For one thing, while Apple sales may have slowed in China, the sales of the locally manufactured Huawei, Xiaomi and Oppo brands rose strongly.

In many ways, Apple’s woes in China are more a result of market competition. Its annually upgraded models in the past few years have contained fewer new and exciting features, making users hold on to their current models for much longer.

But they are still almost twice as expensive as the locally manufactured brands that boast similar – and sometimes even better –........

© South China Morning Post