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> In the Chinese app store market [there are] five to ten commonly used app stores, and yet even the largest has less than a majority market share. Most Chinese people have more than one app store on their phone, so there is no monolith there, whereas “outside of China, Apple and Google control more than 95 percent of the app store market share”. Ecosystems with multiple app sources work, and governments around the world believe that monopoly forces are what keeps Google Play and Apple App Store dominant.

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The interesting counterpoint to this, though, is that China is less concentrated in spots 1-5, but way more concentrated comparing the Top 5 vs. the rest.

Among Internet brands, the classic $100bn+ market cap companies of Tencent/Alibaba/Meituan/PDD/JD/Bytedance are followed by Baidu/Kuaishou both around $30bn and then not many other meaningful names.

Compare this to the US where Google/Amazon/PayPal/Netflix/Facebook/Booking.com/Airbnb/Uber/Square/eBay/DoorDash/Zoom form a much smoother distribution, probably because the scaling advantages of US app stores.

Serious and thoughtful question here, since this may sound flippant -

Could the Apple ecosystem of devices be the factor that enables the distribution of market caps? (Very interesting point, by the way)

I wonder if it explains the somewhat odd gap in the middle of the China market cap distribution, since Android absolutely dominates the China market at the tail end and Apple dominates at the high end.

Apple conflates their walled garden with the high perceived value of their devices, which I'm intentionally ignoring for the purpose of this question.

That's because all the top companies in any sector in China are subsidized and heavily supported by the government. The distribution isn't as organic, it's more a matter of in China, crossing the threshold to being the "golden child" and being guaranteed success right after.

"That's because all the top companies in any sector in China are subsidized and heavily supported by the government."

How? Favorable regulatory environment? Cash payments/subsidies?

In a corrupt enough society they can just go after the competitors with bogus legal claims.

Lovely handwavey truism but that doesn't do anything to explain the actual mechanism at work here.

I'm not sure where you guys are coming from, but the top officials of China acknowledges this is an issue. Are you saying that they are wrong and that China doesn't have a huge problem with corrupt officials? Or why else are you questioning these things?

https://www.forbes.com/sites/ralphjennings/2018/03/15/corrup...

In fairness accusations of corruption to remove political opponents or "troublemakers" have a long and storied history of application by genocidal dictatorships like China, democracies, and basically every form of government.

So merely having an accusation doesn't really say much.

Like patent trolling?

I don't know enough to support their extreme position, but for the sake of information:

Part of it is state-owned banks (the dominant form of banking in China) offering attractive lending to state-owned enterprises, as loan officers avoid the risk of being accused of corruption.

Also, there likely is/was more direct encouragement of exporters (e.g. by subsidies), similar to other countries, but my source doesn't specify if this currently applies to China.

Source: Fault Lines: How Hidden Fractures Still Threaten the World Economy (2010)

None of the top Chinese tech companies are state-owned. Also 2010 was before Xi Jinping. Things have changed a lot now. Now they get striked left and right by regulations. Just look at their stock price.

Based in Beijing. This is not true.

From what I know about how things work, the argument makes sense. Just denying won't cut it. You need to propose an alternative view. I am willing to listen.

The competition is in many things in Asia we also have Amazon competing with homegrown services as well as Chinese large companies. With how much US politicians harp about free market and competition its funny to me to see that China seems to have a freer market and more competitive landscape. As the Communist party does not want any single company to dominate and get out of its control they do not allow any 1 company to dominate too much so all services and products have competitors.

It would be interesting to review how good the end products are. Competition for competitions sake isn’t worth much. You want competition to provide better services. But in a lot of ways, Apple has so much market share because their products are just so remarkably good.

People don’t buy AirPods because they are locked in, they buy them because they are an absolute marvel of technology.

Airpods are not demonstrably better than other headphones on the market by any other standard than their integration with iOS, that sounds like lock in to me... "Oh you've got an iphone? If you want the headphones that work best with iphone you better buy them from the company that makes iphone!"

Correct. "It just works" means either they're accessing a private API or there's unique parts of the firmware that no one other than Apple has access to.

This kind of feeds in to the original point though. The iPhone supports the full bluetooth feature set so 3rd party headphones work fine. The AirPods are only able to do a little bit extra by having the ability to have any part of the OS changed to support them better. This is something that requires a high trust level, you could never expose this access to any 3rd party device.

So it put the AirPods on a level playing field with everyone else, we would have to cripple them because they would have to exist in the same low trust environment. Is this actually better for consumers?

High trust level - like device drivers on any normal OS that is not unnecessarily locked down ?

Yeah, I’m very happy to use an iOS style security model over a windows model.

I certainly don’t want my 3rd party Bluetooth headphones to be loading their own kernel modules.

It depends on the size of the company doing it - i.e. on how impactful the lock-in actually is. But I feel that certainly a boundary past which not crippling such proprietary integration would be more economically harmful overall, despite the convenience.

Apple products are absolutely not "remarkably" good though. They aren't bad at all, but certainly not anywhere NEAR equating the value with the cost. Apple is 100% a luxury brand at a very premium price for most items.

Apple has the market share they do because they copied the playbook of fashion marketing and applied it to technology products in a time of significant industry change. They have continued to make some innovations of course, but mainly in business strategy and marketing. Their products are never really cutting edge technology nor are they remotely the best value for the cost.

Apples takes existing but not mature technology and makes it fashionable then ties it to their ecosystem. You can't even use air-tags without fully getting into the Apple system.

>Apple products are absolutely not "remarkably" good though.

That's a matter of opinion. The times I have actually tried the good value competitors options that are supposedly just as good at half the price, it's not a good experience at all. Most competitors put everything it to a couple of specs that look good on a comparison sheet while neglecting the complete experience. Yeah the obscure android phone might have a 4k display and more ram at a lower price, but they only give 1 year of updates and the ROM is full of bugs and malware.

Having gone through a lot of laptops from a lot of OEMs, the current M series macbooks are the only ones which have actually seemed close to flawless. The value you get is incredible.

On a Chinese 10 yen coin, even the largest of its faces has less than 50% of the coin's total surface area.

On an American silver dollar, though, the two faces added together have more than 95% of the coin's total surface area.

This is a highly meaningful comparison.

(I have sympathy for the article's main thesis statement, but this particular argument in support was a little silly)

Not really, because they host apps for incompatible devices (I also noticed this actually, it would have made more sense to say that each controlled over 95% (or 85 vs 100 or whatever) of the total app market for the platform)

One could argue that the act of 'curation' happens before the stores even begin to offer anything, because anyone with a sense of self-preservation in a regime that likes heavy political censorship will have an instinct for what is within acceptable bounds. And that is before we get to people on boards that keep hands on the pulse and so on.

I guess what I am saying is: "Absolute number of stores does not equal better access to anything." For all my beef with Apple and Android ecosystems, there are ways to bypass most of it ("control over market"). I am not sure, it is an option in China despite having 5 stores as opposed to 2.

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