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Mixpanel Trends: What’s really happening with iOS in China?

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After months of anticipatory rumors and speculation, the iPhone finally launched on China Mobile this past January, and reception has been mixed. When Tim Cook announced at the end of February that both the iPhone 5s and the iPhone 5c had outsold all earlier iPhone models, we thought this deserved some interrogation, especially when it came to China. China is a huge opportunity for Apple – provided everyone plays their cards right. We dug into iOS data coming out of China to get to the bottom of some key observations.

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First and foremost, location is everything: about one third of the data comes from people on the country’s Eastern coast, and it’s clear that activity increases with proximity to major metropolitan areas. There’s also an extremely long tail of Chinese cities where iOS devices are used — 40% of our data is generated by people in 783 cities. The concentration of data in major cities is likely most correlated to income, but may also be linked to Apple and China Mobile’s strategy for 4G: the 4G network is slowly being rolled out across the country, starting with urban areas. It’s already accessible to people living in Shanghai, Beijing, Guangzhou and Chongqing, who may have more incentive to move over to iOS. Chongqing is notably absent from the list of top iOS-generative cities. There are a few reasons why this may be the case: this is probably a geo-locational issue with our IP lookup database. Because Chongqing is so close to other major metropolitan areas, users may be identified as belonging to neighboring cities and regions.

Beijing, Shanghai, and Guangzhou are frontrunners in iOS activity; 4G accessibility may play into this, but it’s more likely due to the fact that these cities are the commercial, financial, and manufacturing centers of mainland China. The people living in and around these cities are wealthier than most and more likely to purchase high-end technology (for both utilitarian and status purposes) than their counterparts in smaller cities, towns, and rural areas.

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On a regional level, Guangdong sticks out as one of the most prominent and active areas for iOS users. Guangdong contains both Guangzhou and Shenzhen; the region is one of the most prosperous in China, with a robust manufacturing industry. The area is the closest region to Hong Kong, a city with a ton of money, high-tech, and many foreigners.Shenzhen is also home to Foxconn, an electronics manufacturing company that makes many of Apple’s mobile devices. While Foxconn employs somewhere around 500,000 people, many of whom live on-site at the factory, it’s hard to say whether this is the same population that’s generating iOS data. But it seems safe to assume that Foxconn’s presence can only serve to raise awareness of Apple and its latest offerings within Shenzhen as a whole.

Notably minor on the list of iOS-generative regions is Tianjin, which has the greatest GDP per capita in China but only sends about 2.5% of China’s iOS data. This may be more reflective of its modest population than purchasing power or interest in iOS devices; Tianjin has only about 13 million residents, which is close to 1/8 the population of Guangdong and less than half the population of Shanghai or Beijing.

That said, population and data usage don’t always correlate. Shanghai and Beijing are almost equal in population and have nearly parallel PPP – logically, their iOS usage is also neck-and-neck. About three times as many people live in Guangdong than do in Beijing or Shanghai, and the region’s iOS usage is comparable. This may be due to the fact that Guangdong is a less wealthy city, with GDP per person about 60% of what it is in Beijing or Shanghai (to say nothing of Tianjin).

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When it comes to the iOS devices themselves, people in China primarily use older iPhone models, with the iPhone 5 taking up significant real estate at 19%. All of the iPhones represented above are CDMA/GSM models, and are specific to a small number of networks within China; China-CDMA phones are usually not functional outside of their origin country. Despite the China Mobile release and marketing efforts for the newest iPhone models (more on that momentarily), preferences clearly lean toward older models such as the iPhone 4S (2011) and iPhone 5 (2012). There’s also a long tail of devices running iOS that don’t fall into the above categories; 22% of iOS data is generated by 25 different types of devices, none of which are represented in the chart above.

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When the iPhone 5s and 5c were released in December 2013, there was a jump in China’s iOS usage, but the devices pushing that increase weren’t the usual suspects. Even when Apple had a huge marketing campaign for the 5c and 5s, the greatest growth actually came from the older iPhone 5 — which of course became cheaper as soon as the newer models came on the market. A similar trend was seen around the January China Mobile release: volume grew, but the devices driving the data spike still weren’t the 5s or the 5c. People still were drawn to the newly-cheapened iPhone 5, which drove most of the growth seen around that time. One notable area of growth was in iPad usage: this does suggest that when Apple calls attention to itself, people pay attention – interest in (and usage of) Apple products grows, even if that doesn’t translate directly into sales.

So what does this mean for the future of iOS in China? What’s clear is that extra awareness in the marketplace begets returns: this was seen during both the iPhone 5s/5c release, and during China Mobile’s rollout. Though Chinese consumers didn’t show an immediate interest in Apple’s latest iPhone models, interest in Apple devices overall did seem to grow with each new release. It will be fascinating to watch iOS activity in China as 2014 continues, and to see whether iOS usage increases as 4G becomes more widely available. We predict that the release of the iPhone 6 — rumored to be shortly on its way — will catalyze sales of the models it’s intended to replace, further growing Apple’s Chinese customer base.

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