Since its advent in 2007, the iPhone has maintained an evolving relationship to China, with local operations spanning development, production and consumption. Following the release of Apple’s newest iPhone 14 series on September 16, those ties have been thrust into the spotlight as the firm looks to diversify its manufacturing chains.
Despite the throngs of eager consumers that lined up outside Apple stores to purchase an iPhone 14 on its official release date, September 16, early reports show weakening demand in the country. According to statistics from Jefferies cited by Bloomberg, deliveries of iPhone 14 series products in China during the first three days were down 11% compared to the iPhone 13 last year.
Rollout of the iPhone 14 in the Chinese market encountered issues when users discovered that the new “Dynamic Island” moving black bar at the top of the screen inhibited them from accessing certain functions on popular domestic apps. For instance, the search bar for popular video streaming platform Bilibili was obstructed, meaning that users were only able to watch recommended content.
Such complications have since been resolved, but reputational damage may have been done to the brand. Prominent commentator Ren Zeping took to Weibo, calling the Dynamic Island feature a “pseudo-innovation” and claiming that “the iPhone 14 could be a sign of the rise and fall of the Apple empire.”
Another key change brought about by the iPhone 14 series is its adoption of eSIM technology, whereby users no longer need to insert a physical SIM card to obtain cellular service. However, iPhones bought on the Chinese mainland do not have this function, as domestic regulators and major telecommunications operators haven’t approved it yet.
Regarding the matter, China’s Ministry of Industry and Information Technology stated on September 15 that authorities are looking into the new technology, and that “it will expand the application scope of eSIM technology when conditions are ripe.”
Many iPhone fans in the country don’t seem too fussed. When questioned while waiting in line to purchase the latest smartphone at an Apple store in Beijing, one consumer said that, despite early issues with Dynamic Island on Chinese apps and the lack of the eSIM found in overseas versions, “the iPhone is still China’s favorite option.”
In addition to high levels of consumption, China’s role in the iPhone development process has evolved dramatically throughout the past 15 years.
Recent reports indicate that Apple is now producing iPhone 14s in India, a move intended to diversify the global firm’s manufacturing chains. Economic disruption in China and geopolitical hurdles seem to have made it clear to Apple the risks of concentrating its production almost exclusively in one country.
Meanwhile, Chinese firms and experts have been contributing more and more to the technological development of new iPhones. A recent article by The New York Times points out that during the early years of the iPhone, China contributed just 3.6% of the overall value of the device, according to an academic study. That proportion has now risen to more than 25%, as Apple has partnered with a broader range of Chinese entities to achieve final design and assembly.
Rising inflation around the world and the impact of continuing COVID-19 control policies in China have led some to wonder whether sales of top-shelf smartphones would flop. However, Wayne Lam, an analyst at CCS Insight, has noted that the industry tends to see a major wealth gap, so premium products such as the iPhone 14 series will not be severely impacted by wider economic trends.
Nonetheless, the Chinese market of today is not the same as when the first iPhone was released in 2007.
On September 21, just days after the iPhone 14 hit the shelves, Shenzhen-based consumer electronics juggernaut Huawei released its latest Mate 50 smartphone series for the Chinese market, with reports of many stores selling out of the new devices. Furthermore, plans by Huawei’s former smartphone brand Honor to release a foldable smartphone for the global market have been interpreted as a direct challenge to Apple’s dominance.
Going forward, the global smartphone industry is set to undergo a series of key transformations, such as the widespread adoption of 5G or even satellite connectivity, and perhaps more emphasis on foldable designs.
With the release of each new iPhone series throughout the past 15 years, commentators have periodically speculated about the eventual demise of Apple’s dominance in the sector. But even as the firm looks to spread manufacturing across a wider array of countries, the iPhone’s links to China may continue evolving, but they are unlikely to falter.