Apple iPhone in China’s Mobile Market

4 Industry Analysis using Porters Five Forces model Bargaining power of customers The bargaining power of customers is low because there is no single individual or organization that can control the market. The products are bought in small pieces and there are no customers who buy in large quantities such that they can exert pressure upon the suppliers. In most cases customers buy single handsets and this does not provide them with the power to control the price of the products (Gurau 2007).

Bargaining power of suppliers The bargaining power of suppliers is low because suppliers are many and they cannot regulate the price and quality of products supplied to the manufacturers of handsets.

Manufacturers have a wide range of choice to choose from for the supply of materials and products. This renders suppliers powerless in controlling the market (Gurau 2007).

Rivalry among competitors There is intense rivalry among competitors in the market. Many companies have been licensed to sell their handset brands in the Chinese market. On the other hand, the grey market creates competition to the legitimate companies and this intensifies rivalry among the companies in the Chinese market (Lorat 2009).

Threat of substitute products Threat of substitute products is low and the introduction of handsets phased out the traditional means of communication such as landline telephones, mails among others. Before the internet enabled phones were introduced into the market, the use of internet had become a major threat to the use of handsets. Today, handsets are used to communicate via the internet and therefore, internet is no longer a substitute to the use of handsets.

Threat of new entrants