According to Shanghai's First Financial Daily, Apple has stepped up control over its distribution channels in China by halving the number of its licensed national distributors from four to two as it becomes more reliant on its own stores, "premium resellers" and electronics retailers, Shanghai's First Financial Daily reports.
While Apple China declined to comment on the adjustments, officials at Beijing Founder Century Information Systems and Beijing Hanlinhui Information Industry confirmed with the newspaper that both companies no longer act as nationwide licensed distributors for Apple.
This leaves only two companies in such distribution deals with Apple in China — ECS Technology (China) and Changhong IT — and allows Apple to achieve its goal of delivering its products directly to customers, the newspaper said.
Declining profits have forced Century Founder to open its own stores selling Apple products in Henan and Hebei, and Hanlinhui in northwest China, the newspaper said.
Despite the premium resellers' competition for prime retail space in major Chinese cities, the 8% profit Apple gave them did not really support their businesses. According to the reseller, his stores mainly rely on the income brought in by selling accessories for Apple products, which have a gross profit margin of more than 30%.
Apple's iPad Mini Launch Fails to Attract Normal Crowds in Key Asian Markets
In other Shanghai news, the launch of the iPad mini drew much smaller crowds than other Apple devices have in the past. Apple's Hong Kong Store, according to the report, had more in-store-staff than customers waiting to get their hands on an iPad mini. Other Stores such as the one in Sydney Australia drew only 50 people while Apple Stores in Tokyo and Seoul did slightly better with 100 customers each.