Secretive billionaire reveals how he beat Apple in China

DUAN Yongping is convinced Tim Cook didn’t have a clue who he was when they first met a couple years ago. The Apple boss probably does now.

Duan is the reclusive billionaire who founded Oppo and Vivo, the twin smartphone brands that dealt the world’s largest company a stinging defeat in China last year. Once derided as cheap iPhone knockoffs, they leap-frogged the rankings and shoved Apple out of the top three in 2016 – when iPhone shipments fell in China for the first time.

They managed to do it because the American smartphone giant didn’t adapt to local competition, the entrepreneur told Bloomberg in what he said was his first interview in 10 years. Oppo and Vivo employed tactics Apple was reluctant to match, such as cheaper devices with high- end features, for fear of jeopardising its winning formula elsewhere, Duan said.

“Apple couldn’t beat us in China because even they have flaws,” the 56-year- old electronics mogul said. “They’re maybe too stubborn sometimes. They made a lot of great things, like their operating system, but we surpass them in other areas.”

That’s not to say Duan doesn’t appreciate the iPhone maker’s global clout. In fact, the billionaire’s obsession with his US rival is well known: he’s long been a big-time investor in Apple and an unabashed fan of its chief executive officer.

“I’ve met Tim Cook on several occasions. He might not know me but we’ve chatted a little,” Duan said. “I like him a lot.”

Apple couldn’t confirm Duan’s meeting with Cook when contacted by Bloomberg. But Duan has blogged incessantly about Apple’s products, share price and operations since 2013, when the company was worth half what it is today. He needs “a really big pocket” because he carries four devices, including a heavily-used iPhone.

In a 2015 post, he argued Apple’s profit should reach US$ 100 billion within five years. Today, Duan won’t say when he actually bought in but says much of his overseas wealth remains tied up in the iPhone maker. He even lives in Palo Alto, an easy drive from Apple’s new UFO-like headquarters in Cupertino.

“Apple is an extra- ordinary company. It is a model for us to learn from,” Duan said. “We don’t have the concept of surpassing anyone, the focus instead is to improve ourselves.”

Oppo’s gains against Apple may now earn an even broader following for the billionaire dubbed China’s Warren Buffett by local media for his investment acumen. Born in Jiangxi, a birthplace of Mao Zedong’s Communist revolution, Duan began his career at a staterun vacuum tube plant before making his name with homegrown electronics.

Duan left the factory floor around 1990, when China was just embracing capitalism and opening industries to private investment. He headed to southern China’s Guangdong province, then the cradle of liberal reforms, to run a struggling electronics plant.

His first product was the “Subor” gaming console with dual- cartridge slots – a direct shot at Nintendo Co.’s classic Family Computer, known elsewhere as the Nintendo Entertainment System. The 100yuan to 400-yuan Subor became a hit in the absence of local competitors. Duan even enlisted Kung Fu star Jackie Chan to endorse the device. By 1995, revenue from the Subor exceeded one billion yuan.

Duan left to set up a new business that year as the operation flourished – a pattern he would repeat in later years. He christened his second venture Bubugao, literally “rising higher step-by- step.” BBK, as the company came to be known, created a popular line of VCD and MP3 players but later also made DVD players for global brands. Subsidiary Bubugao Communication Equipment Co. became one of the country’s biggest feature-phone makers around 2000, going head-to-head with Nokia and Motorola.

It was the first iPhone in 2007 that paved the way for Oppo and Vivo. While they share a common founder in Duan, the sister brands are fierce competitors, trotting out duelling marketing campaigns in markets from India to Southeast Asia. — WPBloomberg