Challenges ahead of Apple's efforts to win back consumers' hearts (2)

INNOVATION, CHINESE MARKET AS WAY OUT

Apple has been one of the most innovative companies in the technology sector, and its product has changed people's way of life. But looking back to its latest product such as iPhone 4S and iPad mini, its ability in innovation has been called into question.

Helix Investment Management pointed out a three-year pattern of Apple in introducing groundbreaking new products -- the introduction of iPod in 2001, iPod mini in 2004, the touch-screen iPhone in 2007 and iPad in 2010. Thus it set 2013 as the next innovative year for Apple.

Jacobs of Chart Prophet predicted that iCloud and iTV could be the next phase of innovation but warned that "failure to catch on or truly dominate can really hurt Apple."

Thus, Apple must stick to its innovation strategy or its shares will probably continue collapsing and even ruined its image as a tech avant-garde and fashion leader.

It is also of equal importance that Apple should make the most of the vast Chinese market. China is the world's largest smartphone market and Apple's second largest market. If used properly, China holds a good chance to be Apple's next growth point.

Apple's sales in China jumped 67 percent to 6.8 billion dollars in the fourth quarter of last year and the sale of iPhones has doubled with four new Apple retailers opened in the country.

However, Apple's high-end and expensive product has daunted many grassroots Chinese consumers away.

In the third quarter of last year, Apple's market share in China slipped from the fourth to the sixth, falling behind the top smartphone vendor Samsung and other Chinese smartphone brands.

Apple's Chief Executive Tim Cook earlier this month paid a visit to Beijing. He met with the chairman of China's biggest telecom carrier China Mobile.

Cook did notice the opportunities of the Chinese market. He said during his Beijing trip that "China is a very important marketplace for us...and strongly believe that China will become our first (largest market)."

This being said, it is still questionable if the majority of Chinese consumers would afford an iPhone at its current price.

Some analysts suggested that Apple should make cheaper iPhones to broaden its appeal in price-sensitive emerging market, but Cook did not respond to it.

Tapping into the Chinese market can be a way out for Apple, but it is still hard to say whether lower-end iPhones would be a plus for Apple's profit or a minus to its high-end brand the company has over the years managed to build.