Apple grew 32% YoY in China's shrinking phone market due to "strong performance of iPhone ...

Posted:
in iPhone edited April 2018
China's smartphone market suffered its worst decline ever in the March quarter--an 8 percent YoY drop in unit sales--but Apple still managed to achieve 32 percent growth, directly attributed to "strong performance of its iPhone X."

China


A new report by James Yan for Counterpoint Research notes that the world's largest smartphone market declined 8 percent over the year-ago quarter to dive below 100 million units, the first time sales have been so low since Q1 2013.

However, the drop in sales did not affect all vendors equally. Apple's 32 percent growth in a shrinking market was propelled by sales of its iPhone X featuring its modern "bezel-less" design. Meanwhile, budget vendors in the low-end and middle-tier were hit hard by competitive pressures.

China's Xiaomi experienced a surge in shipment growth, mostly driven by its "expansion in the offline segment with aggressive promotions" targeted at "budget-conscious consumers." Apple remained ahead of Xiaomi even in unit market share, despite Xiaomi spending heavily to generate sales of lower-end devices.




The report noted that Apple didn't have to "promote" sales of iPhone X, stating that, "while the promotions were not aggressive for the iPhone X, except in operator channels, its demand remains healthy in the market."

Apple's novel design for iPhone X was initially mocked by critics who sought to disparage its "Notch," but in China, vendors jumped to copy it, essentially advertising Apple as original and innovative.

"One of the key highlights during the quarter was the launch of notch display devices," stated Research Analyst MengMeng Zhang. "By the end of Q1 2018 four out of the top five smartphone OEMs had already launched their devices with notch displays in China."

Apple's sales in China have long been closely watched for signs of weakness, with little parallel acknowledgment that virtually no other Western companies have made any progress entering the Chinese market, even as domestic alternatives have gained an entrenched foundation that would make it essentially impossible for Google, Facebook or Microsoft to materially establish sales there.

Yet Apple's growth in China is just getting started. Beyond iPhones, customers in China are embracing iPad and driving Services growth.

"Apple still holds a large user base in China who haven't upgraded in the past two years," wrote Counterpoint Associate Director Tarun Pathak. "Apple is now back to YoY growth in the first quarter since Q1 2015, which is an indication that its older generation iPhone user base is now upgrading. This can set the set the tone for the vendor's full-year outlook. Furthermore, as Apple enters its seasonal cycle, promotions in the coming quarters will further drive upgrades."

The report comes just days after UBS analyst Steven Milunovich claimed in a note to investors that Apple was "fairly saturated" in China and predicted that iPhone sales in the country would likely remain flat, with relatively little long-term growth.

Comments

  • Reply 1 of 13
    Fix the ‘mullion’
  • Reply 2 of 13
    k2kwk2kw Posts: 1,626member
    And this explains why every android manufacturer is adding a notch (not that i like it because its too big) but they do follow what Apple for good or bad. 
  • Reply 3 of 13
    wood1208wood1208 Posts: 1,770member
    It is simple. Notch or long bar for underneath cameras,sensors,etc. Because human is wired for symmetry, notch becomes issue until in few days we don't notice. life goes on.
    edited April 2018
  • Reply 4 of 13
    croprcropr Posts: 884member
    A different story can be found at https://www.canalys.com/newsroom/chinese-smartphone-market-suffers-hard-landing-shipments-decline-21-q1-2018   ; Same overall downwards trends as in the Counterpoint  article but here Apple is dropping to 5th place after Xiaomi.


  • Reply 5 of 13
    croprcropr Posts: 884member
    k2kw said:
    And this explains why every android manufacturer is adding a notch (not that i like it because its too big) but they do follow what Apple for good or bad. 
    The chief designer of Huawei said to the press that his team was considering a notch already in 2014, but he was afraid of negative customer reactions. The idea was buried until someone else (Apple) had to guts to actually make a phone with a notch.  So all manufacturers are facing the same technical constraints, but everybody is waiting for Apple to take the risk.
    mike54jony0
  • Reply 6 of 13
    rogifan_newrogifan_new Posts: 3,752member
    Since Apple has not announced earnings yet and never announces sales by model why should we trust these figures. 
    muthuk_vanalingamradarthekat
  • Reply 7 of 13
    FolioFolio Posts: 451member
    Meanwhile, news from Wednesday ATT earnings call notes they spent more than usual on handsets due to strong sales beyond holiday season. Not all gloom and doom for apple may 1.
    watto_cobra
  • Reply 8 of 13
    cropr said:
    A different story can be found at https://www.canalys.com/newsroom/chinese-smartphone-market-suffers-hard-landing-shipments-decline-21-q1-2018   ; Same overall downwards trends as in the Counterpoint  article but here Apple is dropping to 5th place after Xiaomi.



    What an utterly useless article. They claim Xiaomi took over Apple but.......nowhere do they even break out Apples numbers. Completely pointless article (in regards to Apple).
    watto_cobra
  • Reply 9 of 13
    cropr said:
    k2kw said:
    And this explains why every android manufacturer is adding a notch (not that i like it because its too big) but they do follow what Apple for good or bad. 
    The chief designer of Huawei said to the press that his team was considering a notch already in 2014, but he was afraid of negative customer reactions. The idea was buried until someone else (Apple) had to guts to actually make a phone with a notch.  So all manufacturers are facing the same technical constraints, but everybody is waiting for Apple to take the risk.
    Huawei also bragged they had the first neural processor in an SoC (they didn't, Apples A11 hit the market first). They only "announced" it first, as if vaporware counts.
    watto_cobrajony0
  • Reply 10 of 13
    avon b7avon b7 Posts: 3,218member
    cropr said:
    k2kw said:
    And this explains why every android manufacturer is adding a notch (not that i like it because its too big) but they do follow what Apple for good or bad. 
    The chief designer of Huawei said to the press that his team was considering a notch already in 2014, but he was afraid of negative customer reactions. The idea was buried until someone else (Apple) had to guts to actually make a phone with a notch.  So all manufacturers are facing the same technical constraints, but everybody is waiting for Apple to take the risk.
    Huawei also bragged they had the first neural processor in an SoC (they didn't, Apples A11 hit the market first). They only "announced" it first, as if vaporware counts.
     The Kirin 970 was announced and launched on 1st September. It was in the hall functioning for all to see. Vaporware it wasn't.

    The first phone to use it was released in the following month. Apple's A-Series processors go into phones and tablets. HiSilicon Kirins go into more devices and are even sold on development boards, no doubt similar to the boards at the presentation.
    muthuk_vanalingam
  • Reply 11 of 13
    frantisekfrantisek Posts: 372member
    Without unit sales data article has little value.
    cropr said:
    A different story can be found at https://www.canalys.com/newsroom/chinese-smartphone-market-suffers-hard-landing-shipments-decline-21-q1-2018   ; Same overall downwards trends as in the Counterpoint  article but here Apple is dropping to 5th place after Xiaomi.


    But it is interesting how they avoid talking about Apple. From numbers you can read this:
    The total market share for vendors outside the top five fell from 34% in Q1 2017 to 19% this quarter. Gionee suffered the worst decline, with shipments down by about 70% to 1.6 million.
    So by simple math comparing to big four data Apple could hold in 2017 8% and in 2018 8%. It would be big drop that does not fit well with this article. Question is what data are miserable or false.

    But what sun will rise even tomorrow.

    edited April 2018
  • Reply 12 of 13
    tzeshantzeshan Posts: 1,857member
    Copying market leader is the simplest method in robbing sales away from the innovator. 
    watto_cobra
  • Reply 13 of 13
    saltyzipsaltyzip Posts: 193member
    Why does the canalys report released today say apple slipped to 5th in China and is doing poorly, just a 4 horse race?

    Perhaps apple insider should be reporting on that?

    https://www.canalys.com/newsroom/chinese-smartphone-market-suffers-hard-landing-shipments-decline-21-q1-2018

    I've noticed this website only seems to report on supposed positive analysis, but it could all be fake news.

    edited April 2018
Sign In or Register to comment.