Apple is rumored to be working on a new iPhone designed specifically for the Chinese market. If the reports are true, it will be the first time that the Cupertino-based technology stalwarts are designing a product for a specific market. This a clear indication of Apple’s urgency to arrest the slide in sales figures in its domestic market due to the mounting production costs, courtesy the US-China trade war. Chinese publication Global Times that cites information from industry chain sources claims that the new iPhone will not feature Face ID. Instead, Apple plans to use an in-display fingerprint scanner.
According to an anonymous Beijing-based representative, “A structured laser light emitter, which is the primary component of Face ID, costs several hundred Yuan. Removing it from the iPhone is an effective way to reduce the overall cost of manufacturing.” Apple has declined to comment on the topic at this moment. The new iPhone may sport a smaller display notch compared to the current iPhones since it won’t be featuring complex sensors for 3D facial recognition. No other details on the specs of the China-focused iPhone have appeared yet.
Apple has lost a substantial part of the Chinese smartphone market to local players like Huawei, OPPO and Vivo in the past few years. The present generation of smartphone users in China prefer buying devices within 5,000 Yuan (~Rs 50,000). Increased competition from some of the local smartphone manufacturers have eaten into Apple’s share in the competitive price bracket. In the first quarter of 2019, Huawei holds a 34 percent share of the Chinese smartphone market, followed by Vivo at 19 percent. OPPO comes in third with 18 percent, with Xiaomi close behind at 12 percent. Apple is fifth on the list, with a meagre margin of just 9 percent.
Despite putting sufficient effort in the Chinese market, Apple has been under tremendous cost pressure due to the trade war. The American technology conglomerate is desperately trying to reduce its input costs, since they cannot afford to lose the Chinese market. Apple is reportedly working on moving the production line of its luxury Mac Pro computer to China. It will significantly reduce its expenses in shipping, since most of its components are made in China.
According to Beijing-based Industry Analyst Liu Dingding, the rising cost disparity between Apple and its rivals in the Chinese market is quickly becoming a major issue for the company. “Apple is likely to seize a part of the market that it had lost, after the price drop in China.” Liu added.