iPhone sales fall in China as Apple fails to adapt to market
Shipments of iPhones to China fell last year because of a failure to adjust pricing for the local market, according to the founder of Oppo and Vivo, Duan Yongping. Apple historically insists on high profit margins for the iPhone and, while that strategy has succeeded overall, it has hindered the iPhone's entry into markets such as China and India where high prices can put it out of reach for the average person. An iPhone 7 starts at CNY5,388 ($780), which is as much as many people earn in a month. Last year Apple sank to fifth place among smartphone brands in China.

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Apple's decline in Chinese iPhone shipments during 2016 can be blamed on the company refusing to adapt its tactics to the local market out of fear of risking its business elsewhere, according to Duan Yongping, the founder of Chinese smartphone brands Oppo and Vivo.

Apple is for instance unwilling to pair lower prices with high-end features, Duan suggested in a Bloomberg interview. Without an installment plan an iPhone 7 starts at 5,388 yuan in China, or about $780, potentially as much as a person's monthly wages. Even an iPhone SE is 3,288 yuan, or some $476.

"Apple couldn't beat us in China because even they have flaws," said Duan. "They're maybe too stubborn sometimes. They made a lot of great things, like their operating system, but we surpass them in other areas."

Despite competing with Apple, Duan is actually a major Apple investor and a fan of CEO Tim Cook, with whom he claims to have met several times. Apple couldn't confirm any meetings between the pair.

Duan lives in Palo Alto, Calif., just a short drive from the new Apple Park campus in Cupertino.

During 2016 Apple slipped out of the top three smartphone brands in China to land in fifth. Huawei claimed the top spot, while Oppo and Vivo took second and third. Xiaomi claimed fourth, even though it was also hit with declining sales.

Apple is known to insist on high profit margins for the iPhone, in fact claiming the lion's share of profits in the smartphone industry. While the strategy has been succesful overall, it has also hindered the iPhone's entry into markets like China and India, where high prices can easily put it out of reach for the average person.