1 May 2020 | By DF
This is a 9-part essay series on Apple’s Success in China. Part 1 introduces the essay series. Part 2 explains Apple’s product-zeitgeist fit in China. Part 3 looks at product localization. Part 4 looks at Apple’s services in China and relationship with Tencent. Part 5 looks at the complexities of operating in China. Part 6 and Part 7 look at Apple’s compliance efforts in respect of the App Store and iCloud respectively. Part 8 looks at Apple’s investment in DiDi. Part 9 concludes with lessons from Apple’s experience in China.
Before discussing Apple's product localization for the Chinese market, it is worthwhile to discuss Apple's product strategy in general. Apple's product strategy has three key features:
These three features are mutually reinforcing. None of these points are novel and thus will be covered briefly.
Apple's desire to own and control the primary technologies behind its products is manifested in its proprietary operating systems (iOS, macOS), in-house chip development (notably the A-series chips powering the iPhone), provision of key apps and so on. This vertically integrated business model allows Apple to provide a better user experience, as Steve Jobs explained in an interview:
“The reason is, is because you can't do what you can do at Apple anywhere else. The engineering is long gone in most PC companies. In the consumer electronics companies, they don't understand the software parts of it. And so you really can't make the products that you can make at Apple anywhere else right now. Apple's the only company that has everything under one roof. There's no other company that could make a MacBook Air and the reason is that not only do we control the hardware, but we control the operating system. And it is the intimate interaction between the operating system and the hardware that allows us to do that. [...] Our DNA is as a consumer company—for that individual customer who's voting thumbs up or thumbs down. That's who we think about. And we think that our job is to take responsibility for the complete user experience. And if it's not up to par, it's our fault, plain and simple.”
It is this same level of control that allows integration across different Apple products, an ecosystem that originally included Mac and iPod/iPhone but has now expanded to include iPad, Apple Watch, AirPods, HomePod, and so on. Nonetheless, for one of the world's most valuable companies, Apple's product portfolio is relatively small. At a strategic level, this is because of Apple's insistence on only making products which are significantly differentiated from what other companies can do.
This focus is instantiated in Apple's organizational structure. Unlike other large companies, which typically adopt a divisional structure based on product groups or geographies each with its own profit-and-loss (P&L) statements, Apple is organized functionally.((As noted in the previous part, the only exception to this is China, for which Isabel Ge Mahe is Apple’s Managing Director of Greater China, a region that included mainland China, Hong Kong and Taiwan.)) Employees are hired to perform a well-defined role, rather than “to have skills that check some all-star management box” and only the CFO “owned” a P&L and “one graphic arts team chooses images for the entire company”.
Under such a structure, the job of coordination across different functions falls upon the executive team (known as “ET” within Apple), consisting of “the CEO, the heads of product marketing, hardware and software engineering, operations, retail stores, Internet services, and design— all of whom directly have a hand in Apple’s products—and the heads of finance and legal”.((Adam Lashinsky (2012) Inside Apple: How America's Most Admired—and Secretive—Company Really Works.))
Given such a product strategy and organizational structure, it is in Apple’s DNA to create the same products for the entire world with minimal localization and in accordance with the tastes of Apple’s designers and engineers who are almost entirely in the US. A further, more prosaic, reason against tailoring hardware features for specific markets is because of Apple’s desire to “standardize as much of its designs as possible to make manufacturing efficient”.
Nonetheless, this lack of localization did not inhibit Apple’s initial success in China. As China became a more significant part of Apple's revenues, Apple implemented more China-specific product features. However, I argue that these product features are minimal and did not really move the needle.
In line with Apple's general product strategy, Apple largely provides the same software experience to Chinese users.
For example, the layout of Apple’s mainland Chinese website is consistent with its English-language website, instead of following the more “cluttered” philosophy of Chinese website design. Chinese versions of iOS and macOS are also largely the same.
In the course of my research, I compiled the following non-exhaustive list of China-specific software localization: