source from：wsj
MARKETS  HEARD ON THE STREET
Apple’s WeChat Problem in China
The huge popularity of the WeChat app means Chinese phone buyers can be less loyal

By Jacky Wong
May 30, 2017 5:00 a.m. ET
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Apple has a challenge in China, the world’s biggest smartphone market, that it rarely faces elsewhere—Chinese people are less afraid than most to ditch their iPhones.

The technology giant’s revenue in China fell 14% in the first quarter, its fifth consecutive quarterly sales decline: China was the only region where Apple’s sales fell last quarter. The lack of a new iPhone model explains some of the fall. The company also faces strong domestic competition from Chinese brands like Huawei, Oppo and Vivo, which together hold more than half of the market.

But one key factor that’s often overlooked is customer loyalty. Apple’s success in most countries is largely down to the way it locks users into the iOS operating ecosystem. Anyone thinking of switching to a new Android-based handset has to ponder the hassle of a new interface and setting up all their apps again. About 92% of iPhone owners in the U.S. who consider buying a new phone are going to stay put, according to a recent Morgan Stanley survey. That stickiness allows Apple to sell new iPhone models at a premium.


A man used his mobile phone last year near an Apple store in Beijing. PHOTO: ASSOCIATED PRESS
In China, though, operating systems aren’t such a big deal, says Ben Thompson, founder of research firm Stratechery. Instead WeChat , the ubiquitous social network owned by Chinese tech giant Tencent, is crucial. The app, which began life as a messaging tool and now has almost 1 billion active users, is effectively a mini-operating system itself. Within it, users can do almost anything—download games, pay bills, transfer money or order takeaways.

Crucially, WeChat is available on both iOS and Android. Its flexibility means it’s less of a wrench for Chinese customers to give up their iPhone if they fancy a new model. About half of Chinese iPhone users have switched to phones with Android in the past year, according to a survey by Toutiao, a popular news website.

If Apple is to make better headway in China with its new model—expected later this year—it will have to come up with a better selling point than just being an iPhone.