Apple Inc. (AAPL) Chief Executive Officer Tim Cook is working to broaden the company’s distribution in China as a way to reignite growth after the iPhone maker reported its first decline in annual profit in at least a decade.Cook said Apple is expanding how it sells the iPhone and iPad tablet in China, focusing on areas outside the country’s largest cities. The Cupertino, California-based company is adding more outlets besides Apple stores to sell its devices, and the iPhone is now available in 50 percent more stores in the country than last year, he said on a conference call this week.
Apple’s sales in China rose 6 percent in the recent quarter to $5.7 billion, making it the company’s second-biggest market after the U.S. Yet it lags behind Samsung Electronics Co. and local manufacturers who offer cheaper smartphones and tablets with more design choices than the iPhone and iPad. China is critical as Apple seeks to jump-start sales and profit growth, which have stalled in the increasingly crowded mobile market.Apple’s “one-size-fits-all” approach is more challenging in China, said Robin Li, co-founder and chief executive officer of Baidu (BIDU) Inc., China’s largest search engine.It will take more than new stores to draw in customers, Li said. Mobile phones need to be more customized for the Chinese market, and buyers in the country tend to prefer larger screens and the ability to personalize their devices with software tools to tap out messages more quickly in Chinese, he said.“Chinese characters are very different from English -- you need an input method engine to do that,” Li said in an interview with Bloomberg Television.
“Apple does not have a good one, and they do not allow good ones to be uploaded in the App Store.”Android DominatesBaidu, with more than 20,000 employees, manages about 80 percent of China’s search-engine queries and is working to make its service more accessible for the 464 million customers in the country that log on to the Internet from a mobile device. Devices running Google Inc. (GOOG)’s Android software dominate the mobile-computing market in China, according to Li. Worldwide, Android will have 75 percent of the smartphone operating-system market in 2013, compared with 17 percent share for Apple’s iOS software, IDC estimates.Like many Chinese customers, Li said he uses a Samsung Note smartphone because it has a larger screen than Apple’s iPhone. At the same time, Li complimented Cook for appreciating the size of the Chinese market.“He’s good. He’s very reasonable, he’s very smart,” Li said. “He understands the Chinese market.”
