Apple is encountering challenges, as sales decline significantly in the crucial Chinese market. Tim Cook, Apple’s CEO, recently acknowledged the challenges posed by what he described as “the most competitive market in the world.”

The latest figures reveal a significant decline in iPhone sales both globally and specifically in Greater China, including Hong Kong and Taiwan. Global iPhone revenue dropped by 10% in the first quarter, marking the most substantial decrease since late 2020. In Greater China, iPhone sales fell by 8% to $16.4 billion during the same period.

Apple’s market share in China’s smartphone market has been steadily decreasing, with iPhone sales plummeting by 19.1% in the first quarter alone. This decline has seen Apple slipping to the third position in the market, capturing 15.7% of the domestic market, behind competitors like Vivo and Honor.

Meanwhile, Huawei, Apple’s Chinese rival, has experienced a surge in smartphone sales, with a nearly 70% increase in the first quarter. Huawei’s market share now closely trails Apple’s at 15.5%, with the company’s net profit soaring by an impressive 564%.

Huawei’s success can be attributed in part to patriotic sentiment, particularly following the release of the Mate 60 series phones, powered by domestically produced chips. The latest Pura 70 series phones from Huawei, equipped with China-made processors, are posing significant competition to Apple’s iPhone 15 and 16 series.

Despite these challenges, Tim Cook expressed confidence in China’s long-term potential for Apple. The company is making substantial investments in artificial intelligence (AI) development, with Cook hinting at an upcoming AI strategy reveal at Apple’s annual Worldwide Developers Conference scheduled for June.

While Apple’s financial performance saw a decline due to the slump in iPhone shipments, executives downplayed its significance, attributing it to difficult year-over-year comparisons. Analysts, however, raise concerns about Apple’s performance in China, where intense competition from Huawei is impacting iPhone shipments.

Apple remains heavily reliant on iPhone sales, contributing about 52% of its total revenues. Despite efforts to diversify, other product categories like Mac computers saw only modest growth, insufficient to offset the overall revenue decline.

In response to questions about the impact of investments in generative AI, Cook emphasized Apple’s focus on services, which saw significant growth in the March-ending quarter. However, questions linger about the ability of a hardware company like Apple to effectively monetize software features amidst fierce competition in the Chinese market.

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While we know that the Apple iPhone 13 series has seen robust sales across the globe, a new report has found that its performance was actually “stellar” and may have put the company in a “monster product cycle.”

The news arrives from securities firm Wedbush (Via PhoneArena) and known analyst Daniel Ives. The report added that the Cupertino based giant was only lightly impacted by the global supply chain shortage, since it managed to procure parts for its iPhone. Furthermore, this will help it in seeing a strong performance in the June quarter as well as help in strengthen sales of its next iPhone release as well.

Ives expects that the 2022 iPhone SE 5G will see around 30 million units in sales. On the other hand, the company is also acquiring a higher market share in the smartphone market, largely due to the popularity of its iPhone 12 and iPhone 13 series, which saw a 3 percent market share increase in China alone over the last 12 months. Ives also noted that there were a number of more Chinese consumers willing to buy the iPhone 13 Pro and iPhone 13 Pro Max, “which is a nice positive for the March quarter.”

He further added that Apple is currently in the middle of a “monster product cycle.” Ives stated that the current product cycle is the strongest for the brand since 2015, back when it launched the iPhone 6S and iPhone 6S Plus. The Wedbush analyst wrote in a note to clients that “Taking a step back, while the risk of dynamic in the market has been front and center for tech investors with Apple’s stock also under pressure thus far in 2022 along with other tech stalwarts, we believe the company is setting up for a monster growth cycle over the next 12 to 18 (months) that is not baked into shares at current levels.”

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Apple has become the world’s leading smartphone brand after it achieved record shipments of its iPhones. The company saw a notable jump in shipments in the fourth and final quarter of last year, while Huawei sees a major decline.

According to a Counterpoint Research report, the Cupertino based giant witnessed a sizeable jump of 22 percent in terms of shipments during this quarter. The company’s great sales are most likely carried by its newly launched iPhone 12 series, which is its first 5G enabled lineup. Furthermore, the boost in sales was also helped by pent up market demand, especially for people looking to upgrade from their older Apple iPhone models.

During Q4 2020, Apple iPhone shipments crossed 90 million units, which is a record compared to any other quarter. This also gave the company a global market share of 23.4 percent. Canalys analyst Nicole Peng added that “In China, Apple seized the perfect opportunity to capture Huawei’s market share in the high end, when the latter has essentially not enough supply even though demand for the brand is still there.” As per Apple CEO Tim Cook in an interview with Reuters, “We had two of the top three selling smartphones in urban China.”

The fourth quarter is usually the strongest for the company owing to its launch of new iPhones during the second half of a year. Apple overtook Samsung, despite the South Korean brand also seeing a 6.2 percent rise year on year, reaching 73.9 million units and achieving a market share of 19.1 percent. Meanwhile, Huawei saw a drastic impact on its shipments due to US sanctions, which had its shipments plummet by a record 42.4 percent to 32.3 million units.

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Apple apparently has seen one of its best quarterly performance in the fourth and final quarter of 2020 in India. The company has reportedly doubled its iPhone sales during this time and raised its local market share as well.

According to a TechCrunch report, market research has found that the company has doubled its iPhone sales in the region, achieving its best ever performance in a quarter. This had the Cupertino based giant hold a market share of 4 percent during this period, with annual sales growing by 60 percent with more than 3.2 million units sold. While the performance of the company is notable, it is still nowhere near some of the top brands in the region.

However, the company is making active efforts to grow into the world’s second largest smartphone market. At the moment, Apple witnessed strong sales thanks to its older iPhone models like the iPhone 11, iPhone XR, iPhone SE, and growing interest for its iPhone 12 series as well. Notably, the company has also started local production in the region to avoid heavy duties through its suppliers, like Wistron, which recently suffered from a riot outbreak.

Furthermore, other suppliers like Foxconn and Pegatron are also set to invest in Indian smartphone production as well, with both firms aiming to introduce more production facilities in the region. Both firms believe that local production site could one day act as major export hubs in the near future. So stay tuned for more updates.

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Despite the Apple iPhone 12 series launch being delayed, the 2020 lineup was met with a positive reception overall and saw strong sales. However, the company might have been ‘disappointed’ with the iPhone 12 mini sales.

According to a CIRP report (Via 9To5Mac report), the iPhone 12 family accounted for 76 percent of new iPhone sales during the month of October through November just after the launch. Out of the entire lineup, the 6.1 inch base iPhone 12 model held the largest share of new iPhone sales in the US, with a 27 percent share. This was closely followed by the iPhone 12 Pro and iPhone 12 Pro Max, both of which accounted for around 20 percent of new iPhone sales in the US during the same period.

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This figure is higher than the iPhone 11 series during its launch, which only accounted for about 69 percent of new iPhone sales. In other words, the iPhone 12 series is the most successful iPhone lineup in the US during the period after its launch. But despite its great market performance, the Consumer Intelligence Research Partners report found that the 5.4 inch iPhone 12 mini model didn’t match up to Apple’s expectations.

As per the report, the Apple iPhone 12 mini only accounted for 6 percent of new iPhone sales in the period of October to November 2020. According to analyst Mike Levin, the reason for this might have been the pricing of older iPhone models like the 499 US Dollars iPhone XR and the 599 US Dollars iPhone 11, which might have been more attractive to prospective buyers.

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In an effort to boost sales, Apple has officially slashed the prices in China as the country is on the step to slowly reopens during the Coronavirus pandemic. The lowered prices will be seen during JD.com’s 618 shopping festival where customers can find cut down prices of available iPhone models.

Apple hasn’t officially discounted the actual prices for iPhones on its website but other third party retailers will offer the current generation of iPhones at lowered prices. China’s Tmall is offering the 64GB iPhone 11 variant for 4,779 Yuan (roughly 670 US Dollars), which is about a 13 percent discount from the original 5,499 Yuan (roughly 774 US Dollars) price tag of the device.

Similarly, the iPhone 11 Pro is being offered at a 13 percent discount as well, with prices falling from 8,699 Yuan to 7,579 Yuan (roughly 1,066 US Dollars). The iPhone 11 Pro Max is also available for 8,359 Yuan (roughly 1,177 US Dollars), down from 9,599 Yuan. Apple is also slashing prices of its newly launched iPhone SE as well, dropping to 3,099 Yuan (roughly 436 US Dollars) from 3,299 Yuan.

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On JD.com, Apple iPhone sees an even sharper price cut, with the 64GB iPhone 11 dropping to 4,599 Yuan (roughly 646 US Dollars), which is 180 Yuan cheaper than Tmall’s prices. The lowered prices are reflected with other models as well, with the iPhone 11 Pro arriving at 6,999 Yuan (roughly 984 US Dollars) and iPhone 11 Pro Max being sold for 7,499 Yuan (roughly 1054 US Dollars). The iPhone SE 2020 is also priced at 3,069 Yuan (roughly 431 US Dollars) on JD.com, which is also the official Apple reseller in China.

According to a JD.com spokesperson, the massive Apple discounts are having the “desired effect” as sales of Apple products during the sales have nearly tripled. The 618 shopping festival will run for a couple of days and while Apple doesn’t usually take part in it, the declining performance during the first quarter of 2020 has made the company act proactively to urge people to upgrade their handsets.

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(Via)

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Apple is struggling to maintain its smartphone market over the past year in China. Many local companies including Huawei and Xiaomi are giving stiff competition to the Cupertino giant. There are many reports citing reasons behind such a decline, but no one confirmed the actual numbers. Thanks to a new report from Reuters highlighting the extent of how many Chinese are moving away from Apple.

The report cites that Apple’s share in the Chinese market tumbled from 81.2 percent to 54.6 percent in the past year.  Majorly, the products falling under $500-$800 categories are worst hit with the increasing competition from local brands. While referring to the iPhone X line, Neil Shah research director at Counterpoint said: “Most Chinese smartphone buyers are not ready to shell out beyond $1,000 for a phone, and This left a gap in the below-$800 segment which Chinese vendors grabbed with both hands.”

Chinese are also missing some key features on Apple devices, it constitutes either a single or a dual rear camera while its competitors like Huawei are flocking their devices with new innovations. These days Chinese consumer look for multiple cameras, and other premium features at an affordable price.

Huawei market share improved a lot in China, jumped from 26.6 percent from 8.8 percent within a year. Huawei P20 Pro and Mate 20 are the main attractions among smartphone users in China. Even confirmed by smartphone reseller He Fan, CEO of Huishoubao, said, “Huawei’s cameras have become noticeably better than Apple’s in that they suit the tastes of Chinese consumers more.”

• Read More: Counterpoint’s Global handset profit share ranking shows Apple as the most profitable brand!

Apple’s poor sales are not only limited to China but worldwide, many factories are running at half-capacity from past sometime. To overcome this situation, Apple needs to develop cheap phones, maintaining the same build quality and better specifications. More innovative features will also ensure Apple to earn back its share in China.

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Apple is struggling to find new iPhone users in China. It appears Chinese lost interest in the Cupertino giant’s smartphone, as fewer consumers search for it, reveals Longbow research. As per the Chinese search engine, Baidu, the search trend for iPhone dipped 48 percent last month. It’s the fifth consecutive month of decline in the search queries.

Baidu search data directly corresponds to the actual smartphone market’s demand. In over last four years, Apple iPhone year-on-year sales correlates upto 74 percent with the Baidu’s search data. Moreover, the data shows 82 percent correlation with iPhone shipments into China. “Multiple iPhone price cuts did not stop China iPhone search trends from weakening further while February supplier sales were abysmal,” Longbow analyst Shawn Harrison said in a note Tuesday.

Apple iPhone lost 5% share in China year-on-year while witnessing 30% decline from January. Although the search isn’t the accurate tool to measure demand but a huge drop is somewhat reasonable. It correctly depicts Apple’s reducing popularity in China.

The situation is alarming as even multiple rate cuts by Chinese retailers haven’t shown any sign of improvement. However, official numbers are not present, and its quarterly reports are scheduled for 30th April. We have to wait for the official figures to know the actual situation of the company in China.

Longbow kept Apple’s rating neutral and expected $11 share price in this fiscal year. “We currently do not see any catalysts near term to drive significant EPS upside,” Harrison said.

• Read More: Apple’s problem not going away even with lowered iPhone prices in China

Currently, Apple needs to refocus on its plans in China. Otherwise, it would be difficult to get any boost in sales by 2019. Users are moving towards newer smartphones such as Galaxy S10.

Apple is scheduled to announce new TV and subscription news service at an event on 25th March.

(Via)

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It’s not only around the world, but the global decline in the smartphone shipments is also taking place in India as Apple is bracing itself for its first fall in the fourth quarter this year in India. If we calculate on a year-on-year basis, then the Cupertino giant will decline for the first time in the last four years. As according to a new reasearch report from Counterpoint, Apple is struggling to make pace despite the ongoing festive season in India.

As per Counterpoint’s research director Neil Shah, the sales are expected to remain between 700000 to 800000 units in comparison to a million last year at the same time.

“Sales are set to drop for the first time in four years,” Shah said. “If you look at Q3 – it was 900k last year and this (year) is almost 450k.” He further added, “iPhones have gone costlier and the features and specs aren’t that compelling. The install base of Android has grown vastly; the new customer base (for Apple) is not coming.”

Apple even blamed the disappointing global sales by pointing towards poor sales this year in the emerging markets. Well, the blame game has started, and the companies are terming the global slowdown for the decline in performance this year. Tim Cook pulled some wraps off the problems that company is facing by terming them as  “speed bumps along a very long journey.”

While other analysts are talking about Apple’s lost glory as the Cupertino giant is unable to offer compelling features at a high price. People are leaning towards more costlier Android phones which have gone to different levels.

• Read More: Report: Global smartphone sales fell by 3%, Xiaomi and Huawei still on the ascent in Q3 2018

Overall, the current scenario is not too bad for Apple, and it seems the company needs to reinvent ways to lure customers. Besides, old iPhone sales remained high means Indian revenue will be flat or will gain a little more than the last year but will end in red (loss).

(Via)

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