Apple opens new store in China, more expected

People queue to enter the new Apple store in downtown Chongqing, a southwestern Chinese municipality, July 16, 2014. [Photo/IC]

CHONGQING - Apple opened a new store in Chongqing municipality in Southwest China on Saturday, bringing the number of Apple stores in the Chinese mainland to 11.

Another Apple store is expected to be opened on Aug 2 in Wuxi city in East China's Jiangxu province, about a one-hour drive from Shanghai.

Apple CEO Tim Cook said last year the company will open more than 25 stores in China in the future.

Although Apple declined to disclose future plans, its Chinese website lists job opportunities in Apple stores in 16 provinces and municipalities in China, including East China's Shandong, Zhejiang, Jiangsu, and Anhui provinces, as well as Guizhou in Southwest China. Among the listed locations, only Beijing, Shanghai, Guangdong, Sichuan, and Chongqing currently have Apple stores.

The store opening followed news on Monday that nearly half of China's population, or 632 million people, are Internet users, while mobile Internet users reached 527 million.

Earlier this month, China's top three telecom operators - China Mobile, China Telecom, and China Unicom -- announced they will cut their marketing budgets, including contract subsidies, by a total of $6.4 billion in the next three years to secure profits.

The decision by the big three was seen as a response to a new taxation policy that took effect June 1. The telecom industry was included in a pilot taxation program to replace business tax with value-added tax (VAT).

An ABI Research report showed that the average subsidy from operators for Samsung handsets is 84 percent and the average iPhone subsidy is 70 percent, meaning most upfront costs for the two brands were covered by operators. In Beijing and Shanghai, telecom operators even paid to advertise these high-end gadgets.

The big three's budget cuts could possibly affect sales of the two brands, according to market observers, and Apple should lower dependence on operators and explore its own marketing channels.

Apple reported its third-quarter revenues this week. The results in China were unexpectedly robust, where iPhone sales increased nearly 50 percent in the second quarter of this year. Cook was quoted as saying, "China, honestly, was surprising to us," adding that "the unit growth was really off the charts across the board."

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