Apple has a major advantage over Google in the world’s most populated country.
The Cupertino firm is now the biggest Western software seller in China, according to an analyst note from Macquarie sent to investors this morning.
Citing internal analysis and App Annie numbers, Ben Schachter, Ed Alter, and David Gibson said the company earned around $US6 billion (£4.77 billion) from Chinese App Store sales in 2016.
They said that could more than double to $US16 billion (£13 billion) by 2020 if Apple just maintained its current share of the market. They added, though, that Apple was only likely to get bigger as a rising Chinese middle-class buy more iPhones.
Google doesn’t sell apps in China
To be clear, Apple can take the crown of being “the biggest Western software seller” in China because most Google services are banned from the country.
While Chinese handset makers — like Xiaomi — rely on Android, users have to buy apps from third-party app stores operated locally. Apple’s App Store has been in China since 2010.
So while Android is overall bigger than iOS in China, the ecosystem’s fragmentation is an advantage for Apple.
As the analysts wrote: “Android is fragmented, against only one iOS — while all Android app stores combined (Google Play plus third-party stores) is likely to remain larger than iOS going forward, we expect [Apple] to retain the single largest app store with iOS.”
Apple can maintain a Chinese presence is because it’s willing to kowtow to local censorship rules. In January this year, Apple pulled the New York Times app from the Chinese App Store after a government request.
Still, it looks like Google’s working on the problem. According to a report from The Information, Google may partner with Chinese player NetEase to bring Google Play back to China.
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