IPhone Sales Collapsed in China and We All Know Why

Apple is challenged by the rise of rivals such as Huawei which is eroding its share of a market once pivotal to driving its growth

Apple no longer breaks out detailed numbers on iPhone shipments in its quarterly results, meaning that surveys and channel checks by the likes of IDC are often the clearest indicators of shifts in sales.

Apple iPhone's shipment to China dipped by nearly 20 per cent in the quarter ended in December 2018.

Apple saw its sales in China fall by almost 40 percent on year in Q4 2018, while other local brands saw their sales drop about 20 percent. IDC said: "The imbalance between the increasingly severe domestic market environment and the high pricing of Apple products has led to a decline in iPhone shipments in the Chinese market".

Apple's latest iPhone models, which are mostly priced above US$1,000, face a tough challenge from Chinese-brand devices that cost about half or a third less.

Apple revised its guidance ahead of that report in early January, when it said a weakening economy in China and the strength of the USA dollar were to blame for weaker-than-expected iPhone revenue. A slowing economy, lengthening replacement times and the iPhone's hefty price tag contributed to the USA giant's decline in China, IDC said.

Meanwhile there is intense competition between major manufacturers like Apple and Samsung and with local vendors like Huawei, Xiaomi, Oppo and OnePlus. But with the country announcing its slowest economic growth since 2009, Apple said its sales fell 27 per cent in the holiday quarter.

Apple said its services division, which includes iCloud, the App Store and Apple Pay, saw revenue advance to $10.9 billion, up 19 percent over the prior year.

In recent times, many Chinese smartphone makers are adopting a two-brand strategy to cater to different customer segments. Its unit shipments soared 23% in the December quarter, according to IDC.

Nobody told Huawei about the smartphone slump. That is despite grappling with an unusually turbulent few months during which its finance chief was arrested on allegations of bank fraud, and the United States marshalled its allies to try to block the company from selling next-generation networking equipment.

Huawei, which briefly surpassed Apple to become the world's No. 2 smartphone brand a year ago, led all major brands in China. And "5G phones will still only comprise a very small portion of the overall market".



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