When Tim Cook dropped by Starbucks on a visit to China last year, he pulled out his phone to use Apple Pay. No dice — the Apple boss’s account lacked a connection to the country’s dominant payment system, so an assistant was obliged to step in and buy him coffee.
Apple often has such problems in China, where it struggles to attract users away from cheaper products that feature widely used local apps such as Tencent’s WeChat.
“China is a big problem and not easily addressable,” says Geoff Blaber, analyst at CCS Insight. “Apple’s differentiation has always been content and services driving the premium [hardware]. That differential is very hard to justify in China.”
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