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Apple In China In 2019: Court Battle, Trade War And 5G Challenges

Apple In China In 2019: Court Battle, Trade War And 5G Challenges
There are a lot challenges for Apple Inc with respect to China in the new year ranging from the roll out of 5G network, the outcome of the trade negotiations between the US and China and the impending threat of a ban on sale of some iPhone models  following a court order that has been challenged by the iPhone maker. Rivals such as Huawei and Samsung are already ahead of Apple in the Chinese market.
These challenges have would be attempted to be negotiated by Apple in a market where soft demand had forced the company to issue its first profit warning for the fiscal first quarter resulting in a wipe out of $75 billion from its market valuation just two days ago.
Apple Chief Tim Cook told investors that a more than expected slowdown in the economy of china was the primary drag on the firm’s performance in China which had been compounded by the trade spat between Washington and Beijing.
“We did not foresee the magnitude of the economic deceleration, particularly in Greater China,” he said.
According to analysts, one of the major challenges for Apple in the Chinese market was the launching of comparable technology at lower price by stronger rivals like Huawei Technologies Co Ltd and the bubbling patriotic sentiment amid the trade war.
Apple was also barred from selling some of its smartphone in the Chinese market by a Chinese court in December at the request of chip maker Qualcomm which has been appealed against in the  high court by the iPhone maker. Of the ban, a result of law suit filed by Qualcomm against Apple over patent violations, is enforced ultimately, Apple could be forced to  stop sale of its iPhone models from the 6S through the X.
To add to insult, Apple was urged on Thursday by the China Anti-Infringement and Anti-Counterfeit Innovation Strategic Alliance, a local Chinese industry body, to adhere with the court order and not “trample the Chinese law by leveraging its super economic power and clout.”
“These are tough times for Apple in China,” said Neil Shah, research director at Counterpoint. If the ban is implemented, the market share of Apple could slid down to 7 percent this year, Shah added.
Apple’s 5G strategy in China is another question mark for the company. It is expected that the US phone maker would not have a 5G-enabled phone until 2020 in China which would put it behind rivals such as Huawei, Xiaomi Corp and Samsung Electronics.
China plans to start a pre-commercial phase of 5G network this year and a commercial network in 2020.
The rivals of Apple are way ahead in this matter with a 5G phone planned to be launched by to Huawei mid-year and Xiaomi in the third quarter. Samsung could unveil its 5G phone sometime middle of this year.

Christopher J. Mitchell

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