Exclusive: Apple has made “strategic mistakes”
Apple suffered a steep loss in January after warning investors of weak revenues, but tempered expectations helped the company reclaim the top position with a leading market capitalization in February. While both Apple and Samsung have witnessed lower-than-expected smartphone sales, Huawei and Xiaomi have bucked the trend with increased sales and revenues.
AMEinfo had an in-depth conversation with Prof. Mark Greeven, a leading voice on China, innovation and the global economy to make sense of a score of issues by taking a deep dive into the reality of each situation. This is the second of a three-part interview with him.
Before we take the plunge, here’s a bit more about Prof. Greeven.
Prof. Mark Greeven is a Chinese-speaking Dutch professor who has been associated with China’s Center for Global Research and Development (GLORAD) and Netherlands’ well-known Rotterdam School of Management, Erasmus University. He has been advising Fortune500 companies in China and Europe since 2004 and has published multiple pieces of research in international academic journals as well as leading newspapers such as The Financial Times.
His third, and latest book ‘Pioneers, Hidden Champions, Changemakers, and Underdogs: Lessons from China’s Innovators’, is an outlook to the future but is based on 10 years of primary empirical research with hundreds of companies. It identifies patterns and competencies on how Chinese companies innovate, what they do when they innovate, and why they innovate. The book also serves a warning about thousands of companies that are under the radar, almost invisible, that are driving cutting-edge innovation.
The rise of Huawei; Apple’s dip from grace
Prof. Mark Greeven: First of all, Huawei as a company – even compared to Oppo or Vivo in China – has an actual technological advantage. The hardcore capability in research and development is something that they built up over a decade. This makes their phones, their phone camera, the functioning device, a very good product. This is one component that helps Huawei eat into the Apple and Samsung market.
Prof. Mark Greeven: Huawei phones are also more suited, more customized, and in fact, in some terms even more user-friendly than, for instance, a Samsung, an Apple, and some of the usual suspects. What has happened is that a lot of these phones, and particularly the software behind these phones, have become user-friendly, more intuitive, and more easy to use. This plays a big role, for instance, in the Chinese market, but also outside of the Chinese market. This is what a lot of young consumers especially the young generation is looking for.
The third point is that Apple when it comes to China, with iPhones, has made a couple of strategic mistakes. The company has not understood well enough what the customer wants. The iPhone X is actually quite expensive. I think they have made a mistake in their market research that gave an advantage to a lot of local players who were certainly good enough, had better price points and were more suited to the market … and this is not only in China but also in other parts of South East Asia and around the world where these players are doing really well.
Huawei has also been smart about where the company can go and find consumers for their products. They have gone to places that a lot of traditional players have not gone. These are companies that have gone to places that are not-so-famous or not so much in the news.
Major trends and disruptions in global innovation in 2019
Prof. Mark Greeven: For both private markets and governments, technology and AI are going to be a big topic. China has put a plan to be a dominant power in AI by 2030, and in February 2019, Trump signed an executive order for an American AI initiative. Europe has also followed suit with a similar decision.
The reality is that we see a whole bunch of companies in China, both digital ecosystem companies and technology companies that are investing and pushing heavily to apply AI technology in society. That is the major trend in the coming year – we are going to see a lot more application and implementation of existing AI technology. This means that apart from the research that is going into AI, there is going to be a lot of actual implementation of artificial intelligence in businesses and in society.
Prof. Mark Greeven: I’m very optimistic about blockchain but I’m not optimistic about the role that the global political landscape is playing in it. China, for instance, has provided a set of limitations on the use of blockchain technology in order to keep control of what’s happening. This is likely to bring about two parallel blockchain developments – one followed by the rest of the world led by the U.S., and another that is China, which is not integrating with that mainstream trend.
To add to that, when it comes to blockchain development, Europe may play a bigger role than we expect. Places like Estonia, Switzerland are doing a lot in this field and, therefore, it’s possible that we’ll see major developments there. Europe has a major role to play in the development of blockchain technology, along with the rest of the world in this year, but this global phenomenon may not include China – unless of course, China comes up with its own version of this.