More than Half of Apple’s China Levers are Unique to Apple

Tim Cook outlined¹ Apple’s key actions / improvements in China during C1Q 2015:

Increased the number of cities with points of sale for Apple products
Increased points of sale to 40K, or ~9% year-on-year
Increased shipping reach of the online store from 319 cities to 365 within 2-day deliver
Opened 6 new stores, to reach 21 total in Greater China
Increased App Store revenue 3x year-on-year, presumably via marketing and #6, below
Increased developer engagement, to the point that almost 50% of the $5B paid out to developers was in the last 12 months alone
Added a key payment provider, Union Pay, as a payment option in Apple Pay

Four of these seven levers are unique to Apple. Android OEMs can invest in #1 and #2 type actions. And they can build up their e-commerce (#3) capabilities, as Xioami has. But without major investment or OS control, it’s very difficult for Android OEMs to imitate action types #4 – 7.

In fact, Xiaomi, by virtue of having its own physical points of presence (service centers) and software layer (MIUI; a play on (Xiao)mi UI and “Me UI”) is best positioned to do anything remotely similar to #4 and #7.

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1. Apple earnings call transcript, from Seeking Alpha. You may need to register.