Beijing must act to offset smartphone sector’s pain as post-iPhone era appears inevitable

By Hu Weijia Source:Global Times Published: 2018/11/14 22:55:49

Shares of Asian suppliers and some assemblers for Apple Inc have fallen recently on concerns that demand for the iPhone has peaked. Although it is still too early to say if Apple's run of miraculous growth has come to an end, it's probably time for the company's suppliers in China to think about what comes next.

In China, which is one of Apple's top three revenue generators, the iPhone is losing its aura as domestic brands pose an increasingly fierce challenge. Chinese people don't have time to wait when it comes to future-oriented design and innovation, as the country's long record of swift economic growth has brought great changes to daily life and Chinese society.

If the California-based Apple can't keep pace with the rapid development of China's tech industry, then Chinese consumers will abandon the iPhone and switch to local brands.

China has showed great tolerance toward Apple to avoid making the US company a target of revenge amid the ongoing Sino-US trade conflict. However, this sincerity may not be enough to halt the company's decline in the Chinese market.

Apple's future will affect the jobs of at least tens of thousands of Chinese people working for its suppliers and assemblers. Over the past decade, the company made great contributions to job creation and helped China build a nearly complete smartphone industry chain. It's hard to imagine a smartphone industry in China without Apple, but Apple suppliers have to face up to the weakness in iPhone sales.

If 2018 is really a turning point for the California-based company, there will probably be strong turbulence along China's smartphone industry chain. Countless Chinese companies are part of that chain, providing parts and components or assembling its products. If iPhone sales fall by several percent, China's industry chain may feel the chill.

China needs to study the impact of any such decline on the country's entire industrial chain. As the US company enters a decline, China must avoid mass unemployment in smartphone-related industries. But the crisis could be transformed into an opportunity to boost the development of domestic brands to offset the pain of the post-Apple era.

The author is a reporter with the Global Times.


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