Friday, 15 November, 2019

Apple sales tumble in China as smartphone market shrinks

China's top electronics retailers slashed prices on the latest iPhones by as much as 20 per cent in past months- an unusual move that illustrated waning enthusiasm for Apple's gadgets Apple iPhone shipments decline in China as Huawei tightens grip in its home market
Ginger Lawrence | 14 February, 2019, 07:19

This was reflected in Apple's earnings release last month, when it said it booked $13 billion in revenue from China during the quarter, down 27 percent from the year-ago quarter.

To address the fall, Apple has suggested it will offer new financing and phone replacement services, while the iPhone XR could be discounted in some markets to offset the strengthening USA dollar.

Apple's shipments in China declined for the third straight year in 2018, further hampering its market share and allowing domestic smartphone maker Huawei to widen its lead over the American manufacturer. A slowing economy, lengthening replacement times and the iPhone's hefty price tag contributed to the United States giant's decline, IDC said according to a Bloomberg report said.

Despite the fall in demand, Huawei managed to rake in a 23.3% gain in shipments while rivals Oppo and Vivo managed to have modest gains of 1.5% and 3.1% respectively.

In fact, sales of Apple handsets fell twice as fast as the rest of the smartphone market as a whole. The Chinese slowdown was the driving factor behind Apple's first revenue outlook cut in nearly two decades. Cook, however, emphasised the long haul, highlighting 19 per cent growth in services revenue, the Bloomberg report said.

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"When smartphones became a commodity for Chinese customers, multinationals need to adjust their overall sales and marketing strategies", Ms Peng said. Apple also didn't seem to work on its Chinese marketing plans -- an area that needs constant updating. "China accounts for three in 10 of all smartphones sold worldwide, and it is a market Apple simply can not ignore", Neil Mawston of Strategy Analytics told China Daily.

However, Apple's woes are not just in China.

For Xiaomi, the fall in shipments have been attributed to factors such as an adjustment in the company's product lines and inventory channels as well as a revamp of its internal organization.

China's smartphone market does not look bright this year, said Wang Xi, a China analyst at IDC. And "5G phones will still only comprise a very small portion of the overall market".