“Apple Inc. dropped to fifth place in Chinese smartphone shipments, losing ground in its biggest overseas market in a fresh blow for the technology giant,” David Ramli reports for Bloomberg.
“iPhones made up 10.8 percent of devices sold in May, down from 12 percent a year earlier, according to Counterpoint Research,” Ramli reports. “By comparison, Chinese vendor Huawei Technologies Co. increased its lead with 17.3 percent.”
Apple “has suffered commercial, legal and regulatory setbacks in recent months leading to lawsuits and key products getting shut down,” Ramli reports. “Local brands Huawei, Vivo, Oppo and Xiaomi are now the top four smartphone makers in China with a combined market share of 53 percent, according to Counterpoint Research director Neil Shah. Oppo almost doubled its market share to 11 percent.”
Read more in the full article here.
MacDailyNews Take: The iPhone 7 series looms.
This is not surprising for a premium priced product. As the China market grows it is from the second and third wave smartphone adopters which are 2nd and 3rd economic tiers. A smaller percentage of these groups can easily afford an iPhone and fall into the Android camp at higher levels.
I think for many of the non-Apple customers the iPhone still remains an aspirational product.
People who don’t understand business shouldn’t write about it. (I suppose that’s true of any topic.) The purpose of every publicly traded corporation is to preserve and increase shareholder value. Nothing else. That’s done by building free cash flow, which results from profit.
Profit. Not shipments. Why would Apple freaking care if Huawei shipped the most units and lost the most money? Shipments don’t yield profits unless the margins are positive. Anybody with sufficient marketing budget can win the shipments war but why would Apple play that game?
I hate reading about business from outlets like Bloomberg.
Like it or not. Profit and market share are correlated. Market share allows you to do things you otherwise couldn’t get away with to increase profit. It’s not JUST about margins on an individual product.
Drop of 1% and headlines of doom and gloom : “getting killied in china”, “sales plummeting in china”….etc..
Now tell me if thats objective reporting ? or FUD … !
Dropping from 12 to 10.8 is a 10% drop.
If your salary dropped 10%, I’m sure you would feel it.
Good point Joe… (I was referring to the 1% loss in market share not the drop)
Never the less it is not carnage or getting killed or sales plumetting as the headlines try to make it sound like .. Plus the accuracy of the report is not certain either.
But thanks for the perspective !✌🏻️
Apparently the Chinese are smart enough to know not to buy an iPhone now when new models are coming out this fall.
Here we go again….key word there is “shipments”.
Look, I’m sure they are flooding the market over there with knock-off’s but let’s get real, Apple is a luxury brand and only those who can afford it buy it.
But fewer people are buying it. Are you saying that 10% of Chinese who used to be able to afford an iPhone can no longer afford it?
It is bad news for Apple no matter how you try to spin this. I am sure that Tim Cook and company are very concerned.
And Joe.. Also consider the following factors brought up by some of the posters.
We dont know if we are comparing apples to apples.. Sold vs Shipped.. As was the case in Samsung comparisons.
We dont know if that drop translates to less phones sold by Apple if the overall market in china grew to compansate/plus
We dont know how accurate the Counterpoint report numbers are.
So i would not jump to any extream conclusions (At least from this report) given lack of coherent, comprehensive and accurate data.
In other startling news – rusty bicycles are crushing Ferrari in marketshare numbers in China. Ferrari is doomed.
Exactly.
It is hilarious. When Apple was having record shipments in 2014 and 2015, shipments mattered! Market share mattered! Android is doomed! But when shipments drop in 2016: shipments do not matter! Why won’t the analysts admit this? Why can’t the analysts only report analysis that depicts Apple in the best possible light instead of using the same type of statistics and analysis that they have always used in every single industry till now? Where is the fairness?
Also …. unlike the South Korean (save Samsung who is having their best year in 3 years) and Taiwanese (save Asus and possibly Acer) Android OEMs, the Chinese OEMs are doing fine. The reason: they are not merely device manufacturers. They also sell software and services: Internet, mobile, apps (as there is no Google Play store in China), movie/music sales etc. So they can afford to sell cheap devices at low margins and break even by selling their more expensive devices at cost because they get Internet and LTE subscriptions with each device they sell. (Incidentally, they are not just Internet/mobile providers in China, but also in Europe and parts of Africa.) In addition: since the devices are made in China and sold by Chinese companies, they are going to be a lot cheaper by virtue of avoiding tariffs and saving money on distribution/supply chain.
So while Huawei, Xiaomi, LeCo, Oppo and the rest aren’t making Apple money – then again no one is including Samsung, and for that matter Apple wasn’t making Apple money until the iPhone took off – rest assured they are making plenty. And when HTC goes out of business and LG and Sony cut back their sales areas (as Sony already has) they will make even more.
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