Apple's iPhone drops to fifth place in Chinese smartphone market
Apple continued to struggle for ground in China during the December quarter, ceding fourth place in the country's smartphone market under pressure from local brands like Huawei and Xiaomi, according to new research data.
The 43.8 million iPhones Apple shipped in the country was down 18.2 percent year-over-year, and led it to slide into fifth place, research firm Canalys said this week. The company was in fact eclipsed by Xiaomi, even though the latter saw shipments fall 21 percent to 51.4 million.
Leading the market was Huawei with 76.2 million. Oppo slotted into second with 73.2 million, while Vivo managed 63.2 million.
Once expected to be a major growth driver for Apple, China has instead become a battle -- perhaps the biggest obstacle being the high price of the iPhone versus local Android-based options.
When announcing its December-quarter results, the company noted that revenues were down 8 percent in the country. CEO Tim Cook blamed this partly on currency values, but also commented that the market was "not without challenges."
Canalys analyst Jessie Ding suggested that as elsewhere, many Chinese may be content with older iPhones and waiting for this year's models, led by the "iPhone 8," sometimes known as the "iPhone X."
Although it could be a limited model costing upwards of $1,000, the "iPhone 8" is expected to offer an edge-to-edge OLED screen, replacing a physical home button with a virtual "function area." To fill in for Touch ID, the phone may rely on advanced facial recognition.
The 43.8 million iPhones Apple shipped in the country was down 18.2 percent year-over-year, and led it to slide into fifth place, research firm Canalys said this week. The company was in fact eclipsed by Xiaomi, even though the latter saw shipments fall 21 percent to 51.4 million.
Leading the market was Huawei with 76.2 million. Oppo slotted into second with 73.2 million, while Vivo managed 63.2 million.
Once expected to be a major growth driver for Apple, China has instead become a battle -- perhaps the biggest obstacle being the high price of the iPhone versus local Android-based options.
When announcing its December-quarter results, the company noted that revenues were down 8 percent in the country. CEO Tim Cook blamed this partly on currency values, but also commented that the market was "not without challenges."
Canalys analyst Jessie Ding suggested that as elsewhere, many Chinese may be content with older iPhones and waiting for this year's models, led by the "iPhone 8," sometimes known as the "iPhone X."
Although it could be a limited model costing upwards of $1,000, the "iPhone 8" is expected to offer an edge-to-edge OLED screen, replacing a physical home button with a virtual "function area." To fill in for Touch ID, the phone may rely on advanced facial recognition.
Comments
Isnt this the implied conclusion of any store concerning Apple? That the inevitable downfall is just around the corner, and if it's not that corner, then it's SURELY the next one!
I wonder if many Chinese are not yet in a position to appreciate the value of that ecosystem, or if perhaps the ecosystem isn't as fully developed in China.
Only Apple provide Actual Product Sold. Others are Shipped. I expect the number to be off by as much as 5% for Oppo, Vivo and Xiaomi.
Even with Huawai, most of the Top 5, likely 90%+ of their Sales are below $300USD, the starting price for iPhone SE, is $400 USD+.
Sometimes I wonder, why all the Top 4, uses Component from Manufactured in GF, Samsung, TSMC from Qualcomm etc, None of the top 4 have to pay import Tax.The iPhone however require an Import tax, making it 17 to 20% more expensive.
Meanwhile, I'm just hoping Wall Street makes Apple's stock temporary dive over this so I can buy some more AAPL before we are off on the road to >$150
Both Apple and Android fan bases tend to compare devices based on their latest glitz feature as it comes out of the box. Using that as the criteria for comparison insures that the Apple product will always lose... The low cost manufacturers need only copy what Apple did six months earlier and release a 'new & improved' version.
Apple has a marketing dilemma because a large part of what they sell cannot be seen as the gadget comes out of the box. And, most people do not seem to even know that it exists... No matter how much Apple tries to produce a lower cost option, it will always need to charge a premium in order to pay for the infrastructure that goes around that gadget and makes it an outstanding product that "just works".
I saw the same thing transpiring in the battle between the mainframe world and the PC world back in the 90's. The PC applications were always cheaper -- not because PCs were invariably cheaper or the software was inherently cheaper -- but because they omitted features that made the mainframe versions secure, dependable and stable. I fear that Apple may go the way of the mainframe if it does not find a way to market its infrastructure effectively.
Reading them sort of reminds me of a "Peanuts" cartoon, or something. I don't know if it's "A Charlie Brown Christmas" or "It's the Great Pumpkin, Charlie Brown".
1. The Android fan base does as you say. I'm not so sure about the iPhone base, at least not in the US. Maybe it's different in China.
2. There are a lot of features of the iPhone that cannot just be copied 6 months later. The best example is the SOC -- the competition is literally years behind Apple in basic performance.
3. When you talk about the mainframe vs the PC, what you're really talking about is IBM vs Microsoft. IBM had grown fat and lazy. Their pace of innovation had slowed dramatically, yet they continued to charge very high prices. It's not that customers failed to appreciate the value of mainframes -- it's that IBM overcharged and under-delivered. If Apple follows that model (and frankly, when it comes to the Mac Pro, they have) then that's why they'll go the way of IBM. But while I think there are very legitimate gripes about how Apple has been doing with the Mac, it seems to me that Apple continues to add value to the iPhone year after year. I might not always agree with every decision, but they definitely keep the product moving forward.
so... I don't think there is any inevitable slide towards IBM. So long as Apple continues to innovate and charge a price commensurate with the value of that innovation, they'll be fine. It's not a foregone conclusion that Apple will do that, but it's certainly not a foregone conclusion that they won't.