Apple Inc (AAPL) Enjoys an Enviable Position in China via WeChat

Apple (AAPL)

Who could have ever imagined that a single app could turn the market around for a tech giant as powerful as Apple Inc (NASDAQ:AAPL)? But this is exactly what WeChat, or Weixin as it is known in China has proved subsequent to having captured a large chunk of the market courtesy of its multiple functions. To say that it has turned around the local mindset would be correct since it has inspired people, who have shown a tendency for not wanting to pay for software, to actually access bank accounts so that they could finance their gaming urges.

Apple (AAPL)

An example is that of Deng, a resident of Beijing and a quality analyst, who on being asked about the figure she had spent on WeChat refused to reveal the amount out of embarrassment. The publisher responsible for presence of games on iOS is Tencent and it is on one of its games named ‘Timi Run Everyday’ and Deng incurred the maximum expenditure. Apple Inc (NASDAQ:AAPL)’s share of the pie is 30% of the total sales and an upsurge in popularity of the gaming segment has spelled a substantial increase in the revenue coming in from China. The rest goes into Tencent’s account.

As Tim Cook, Apple’s CEO puts it –

“We’re seeing some substantial strength there. The thing that’s actually growing the most is the iTunes, Software and Services category, which has the App Store in it. That area is almost doubling year over year.”

Something that renders this cycle a truly virtuous phenomenon for Apple Inc (NASDAQ:AAPL) is the following observation –

“If you look at who’s playing Temple Run and Candy Crush, a lot of these were non-gamers five years ago. With the advent of smartphones, the ease of use, they started to download apps, and because they’re very casual and fun they start playing games. It hooks them and encourages them to start making payments.”

If anything can spoil the party for Apple Inc (NASDAQ:AAPL), it is the uncertainty that always shrouds regulations and things could turn sour for the global giant if the authorities reduce its profits and favor a lion’s share for Tencent.

This article has been written by Vinita Basu.

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