22 February 2019
Apple has seen a decline in shipments in the Chinese market by 20% in the final quarter of 2018, according to a new report. The company is also facing a ban on some of its older iPhone models, due to the ongoing fight with Qualcomm. Chinese smartphone maker which has been facing problems in global markets has also tightened its hold in its domestic market, which has further led to a decline in Apple iPhone shipments.
A latest IDC report states that the domestic market contracted 9.7% in the quarter, but Apple’s shipments saw double the decline. Apple iPhone sales have been affected by a slowing economy, lengthening replacement times and as well as the hefty price tag of the latest iPhones. However, IDC notes, domestic brand Xiaomi Corp has fared even worse in the final months of last year with its shipments declining by almost 35%. Apple has been ranked fourth in terms of shipments in China, placing it behind Chinese brands Huawei, Oppo and Vivo.
Apple is reportedly facing a plateau due to global market saturation, as well as lack of innovation in its products. The company’s earnings from the iPhone have fallen by 15% in the October to December period. Apple’s CEO Tim Cook has stated during earnings call that China remains a key part of Apple’s strategy. In the last financial year, Apple’s revenues from Greater China were $52 billion. However, Apple sales have fallen 27% in the holiday quarter.
“The imbalance between the increasingly severe domestic market environment and Apple’s high product unit price has led to the declines of iPhone shipments in Chinese market,” said IDC.
Chinese brand Huawei has already toppled Apple and become the second biggest smartphone vendor in the world in 2018. The company is now aiming to topple Samsung and become the number one smartphone vendor in the world in the next 2 years.
“Apple doesn’t have a good go-to market strategy that fits the rapidly changing Chinese market,” said Nicole Peng, a senior director at Canalys. “It also seemed to be slow in reacting to China’s economic slowdown and changes in consumption structure.”
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