Apple + China Mobile = Biggest News from 2013! !We really had to scratch our heads while writing the title of this post -- which to put first, Apple or China mobile? Which is more significant - the world’s biggest computer giant or the world’s biggest mobile market? !Even though the media seems captivated by Apple’s recent news of the launch of the iPhone 5C, 5S, iPad Air and iPad Mini 2 -- we really believe that the news of Apple securing a deal in the biggest mobile market in the world tops all of this and should be considered the coup d'état of all 2013 tech news: !Whether Apple would be granted access to China’s vast mobile market has been a topic of wide speculation for months and finally Apple has confirmed the deal! There is no doubt in our minds that this deal will drive Apple’s 2014 iPhone sales -- each product, even those which are spectacular on their own merits, as the iPhone is, requires a market to be sold in, afterall... !If we could boil it down the point of this post into a single sentence it would be: Apple has secured the biggest market for the iPhone on the planet Earth. !Yes, go check Wikipedia - the number of mobile subscribers in China is about 760 million - that is more than twice the population of the United States! Remember the initial goal Steve Jobs presented at the iPhone release event back in June 29, 2007? He wanted to capture 1% of the billion mobile phone market, a tiny market share of what existed even then! Apple has long passed its’ initial goal, even with the mobile market growing at a rapid pace, and is moving forward quickly to become the world’s dominant mobile device provider. (If they aren’t already.) !Let’s take a look at the number of iPhone sales from January 2008 -till- January 2014: The graph below is plotted based on Apple’s Quarterly Conference Calls where they announce (among other numbers) the iPhone sales for each quarter. !

iPhone sales 2008 - 2014

0

40

80

120

160

Jan, 2008 Jan, 2009 Jan, 2010 Jan, 2011 Jan, 2012 Jan, 2013 Jan, 2014

153.4

135.8

93

47

25142

These numbers are impressive, but 2014 has the potential to become even more so -- Apple’s upcoming January 2014 report won’t be influenced by this deal, since people will only be able to place pre-orders starting on December 25th, by the time Apple has its Q1 conference call not enough iPhones will have been sold via the China mobile market to significantly impact the numbers. But in 2014 Q2, and especially 2014 Q3, when the production will be ramped up to accommodate the increase in demand, we will see iPhone sales skyrocket, for sure - not a single doubt about it! !IMPLICATIONS !Let’s take a look at the implications of this partnership for iOS app developers: Like any healthy, well established ecosystem, the worlds of the iOS device + iOS universe are well connected with each other. An increase in hardware sales has an impact on the software side of the equation -- the more iPhone units sold, the greater the market for iOS apps becomes. Right now there are more than 1-million apps in the iOS App Store and competition is extremely high, especially when you combine the sheer number of apps available with Apple’s discoverability issue (which is the the headache of every iOS app developer). This deal will bring lots and lots of new iOS device users and, hence, potential new iOS app users. !It’s no brainer that localizing apps for China’s market will become extremely relevant. Subsequently, the demand Chinese translation and app marketing services will go up, too. !App brands that were doing well in 2013 will need to consider going into the China market in 2014 to retain their brand awareness. To be successful in this market, they will need to remember the mistakes of companies which made this move before them (like Yahoo) -- going into China, companies cannot assume that the market knows of their brands. Going into China, they will need to start from scratch, as nobody knows you so well that there will be immediate brand recognition and adoption. Companies would be wise to study the local market first to gain understanding of what exactly you need to effectively market your app to a Chinese market. Here it is less about the iOS App Store and more about determining what market channels work best for your app with this very different audience. !Chances are we’ll see the numbers for how many downloads an app needs to be in the China App Store Top-10 and how user acquisition will cost companies being revealed in forum and blog discussions about the ethical vs. unethical practices connected with this process as app launch strategy for China unfolds over much of 2014. !Given the fact that China Mobile covers pretty much all China’s mobile market - which is absolutely enormous- iOS app developers should consider developing and launching new apps specifically for China in 2014. It is that big of a deal. !Last but not least, we think it is a good idea to begin taking Chinese language classes. Yup, it’s time. !Artyom Diogtev, Head of Branded Content