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Apple might have a key part of its strategy wrong as Chinese phones make inroads in overseas markets


Apple may have at least parts of its strategy wrong with too much emphasis on its premium brand and the high prices that go with it.Josh Edelson/AFP

SAN FRANCISCO — A raft of profit warnings from Apple Inc suppliers this week has fuelled investor concerns that iPhone sales, in terms of volume, have hit a wall that could spell trouble for the company’s plans to make services its main pillar of growth.

For the past year, investors had largely been willing to overlook stagnating unit sales of the iPhone because average selling prices kept rising. But now fierce competition from mid-priced phones from makers such as Xiaomi Corp has become difficult to ignore.

Apple’s vision of becoming a company driven by paid services such as Apple Music and iCloud rests on building as large a base of device owners as possible, with the iPhone serving as a critical anchor.

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