Apple experiences massive surge in China sales
Apple is experiencing strong growth in China with its growing middle class regarding the iPhone as a status symbol; Greater China is generating 25% of Apple's total revenue.  However, competition from Samsung and local manufacturers means Apple will need to step up its game considerably.  Experts suggest though that Apple's ability to market the Macbook and iPad range in China could add a lot of growth to their bottom line.  

Samsung already has a solid footing in those markets, and Apple's strategy is to take over what it can of the market for premium phones, powered by its powerful brand image.

Last month Apple established a sales subsidiary in the Vietnamese capital of Ho Chi Minh City which will handle iPhone and iPad sales and repairs. Already in November last year the U.S. company set up a sales subsidiary in Indonesia, the largest market in Southeast Asia.

Apple has begun to increase its share of the Southeast Asian market after a spectacular surge in China.

Apple had not initially been keen to foray into emerging markets because of the high price tags of its products. It had simply focused on advanced markets like North America and Europe.

Even when rival Samsung and other smartphone makers such as Huawei and Xiaomi were trying to expand their presence in China, India and Southeast Asia with cheap products, Apple simply sold old iPhone models there for discounted price.

But in late 2012 Apple began to target new markets directly. It joined hands with China Mobile, the country's biggest telecom, and in 2013 the iPhone 5S went on sale there and did surprisingly well.

Apple went extra the extra mile with adaptations to Chinese tastes like a gold-colored iPhone, but the prices stayed high, and China is now the second-largest market for Apple after the U.S.

When Apple entered the Chinese market, Samsung held the top spot for smartphone sale and was making handsome profits on global sales. In the third quarter of 2013, Samsung achieved an operating profit of W6 trillion (US$1=W1,173).

But once Apple entered China, the appetite for Samsung's high-end Galaxy S and Galaxy Note series began to decline. At the same time the Korean giant lost customers for low- to mid-priced smartphones to local players Huawei and Xiaomi and now ranks a mere fifth.

Now the same thing seems poised to happen in Southeast Asia. Apple already has dedicated stores in Indonesia and Vietnam, where Samsung, LG Electronics and Microsoft hold strong market shares.

◆ Huge Market

Southeast Asia is a burgeoning market for smartphones. According to U.S. market researcher Strategy Analytics, the smartphone market in Indonesia is expected to grow into the world's fifth-largest by 2020 with annual sales of 53.5 million units.

Smartphone sales in Vietnam are also forecast to rise to 25.6 million units a year to make it the 14th-largest in the world, ahead of Korea and Italy. Combined annual smartphone sales in Indonesia and Vietnam total around 80 million, fourth after China, India and the U.S.

As China's economic growth slows, Southeast Asian economies continue to soar. Vietnam in particular is expected to grow even faster as it is part of the 12-nation trade agreement called the Trans Pacific Partnership.

"Samsung works hard to till the soil, but Apple ends up reaping the fruits," one IT industry insider here lamented. "This precedent must not be repeated in Southeast Asia. Samsung will have to improve not only its smart devices, but innovative services and software."