Tag: Chinese Smartphone Market

  • Apple Slips in China, Drops from Top Five Smartphone Vendors

    Apple Slips in China, Drops from Top Five Smartphone Vendors

    Apple has slipped from the ranks of the top five smartphone vendors in China for the first time since it surged in popularity there. According to Canalys, a market research firm, iPhone shipments in China saw a 6.7% year-on-year decline in the second quarter of 2024.

    Rise of Domestic Brands

    Analysts credit this decline to the resurgence of domestic brands. Leveraging advanced, locally manufactured components, Chinese companies such as Huawei, Vivo, Oppo, Honor, and Xiaomi have experienced substantial growth. Notably, Huawei has made a robust return to the high-end market, challenging Apple's premium market position.

    Market Growth and Competition

    The Chinese smartphone market grew by 10% year-on-year, with over 70 million units shipped in Q2. Vivo led the market with a 19% share, equivalent to 13.1 million units shipped. Oppo, Honor, and Huawei followed, each shipping around 10 million units. Xiaomi, which had been facing difficulties, saw a 17% year-on-year increase, re-entering the top five with 10 million units shipped.

    Conversely, Apple's shipments fell to 9.7 million units, resulting in a reduced market share of 14%. Despite offering discounts of up to 23%, the company struggled to maintain its position. Domestic competitors capitalized on localized supply chains and strong brand loyalty among Chinese consumers.

    Strategic Moves

    In light of this decline, Apple’s Chief Operating Officer Jeff Williams recently visited China to meet with officials and reiterate the company’s commitment to the market. Analysts, including Lucas Zhong of Canalys, suggest that Apple needs to localize its “Apple Intelligence” platform for China within the next year to recapture market share. The forthcoming iPhone 16 lineup also offers an opportunity to stimulate demand and improve Apple's market position.

    Nevertheless, the competition remains intense. Domestic brands offer appealing features at competitive prices, and it remains uncertain whether Apple can adapt and regain its former dominance in China.

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  • Apple’s Tough Competition in China with Declining iPhone Sales

    Apple’s Tough Competition in China with Declining iPhone Sales

    Apple is facing difficulties as its sales take a significant hit in the crucial Chinese market. Tim Cook, the CEO of Apple, recently admitted the challenges posed by what he termed as "the most competitive market in the world."

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

    Declining iPhone Sales in China

    Apple's market share in China's smartphone sector has been steadily dwindling, with iPhone sales plunging by 19.1% in the initial quarter alone. This slump has pushed Apple down to the third spot in the market, securing 15.7% of the local market share, trailing behind competitors such as Vivo and Honor.

    Rise of Huawei in the Chinese Market

    In contrast, Huawei, Apple's Chinese counterpart, has witnessed a surge in smartphone sales, registering a nearly 70% increase in the first quarter. Huawei's market share now closely follows Apple's at 15.5%, with the company's net profit skyrocketing by an impressive 564%.

    Apple's Response and Future Plans

    Despite the challenges, Tim Cook expressed optimism about Apple's long-term prospects in China. The company is heavily investing in artificial intelligence (AI) development, with Cook hinting at an upcoming AI strategy unveiling at Apple's annual Worldwide Developers Conference set for June.

    While Apple's financial performance suffered due to the decline in iPhone shipments, company executives played down its significance, attributing it to tough year-over-year comparisons. Nevertheless, analysts are concerned about Apple's performance in China, where fierce competition from Huawei is impacting iPhone shipments.

    Revenues and Future Prospects

    Apple heavily relies on iPhone sales, contributing approximately 52% of its total revenues. Even though efforts have been made to diversify, other product categories like Mac computers saw only marginal growth, which was inadequate to offset the overall revenue decline.

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

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  • Huawei Dominates China Smartphone Market, Surpasses Apple

    Huawei Dominates China Smartphone Market, Surpasses Apple

    Despite facing significant challenges, Huawei has successfully staged a remarkable resurgence in its domestic market of China. The company has reclaimed its position as the leading brand in the Chinese smartphone market, surpassing competitors such as Apple, Oppo, and Vivo.

    Huawei's Resurgence in the Chinese Market

    Huawei's return to the top spot comes at a time when it has been grappling with continued sanctions imposed by the US government. Despite these obstacles, the Chinese tech giant has emerged as the dominant brand in the Chinese smartphone sector, outperforming both local competitors and Apple. According to a recent report by Canalys (Via AsiaNikkei), Huawei experienced a significant surge in sales, shipping 11.7 million smartphones in China during the first quarter of this year.

    This represents a substantial 70 percent increase compared to the previous year. In contrast, Apple, based in Cupertino, slipped to the fifth position as its shipments in China declined by 25 percent. Additionally, both Oppo and Vivo also faced declines in sales during the first quarter of 2024. Notably, Honor, Huawei's former budget smartphone subsidiary, saw a growth of 9 percent in the same period.

    Competitive Landscape in China

    China stands as the largest smartphone market globally, and the competition among the top six brands remains intense. The rankings were closely contested, with only slight variances separating the smartphone manufacturers. Huawei's resurgence to the top position is credited to the launch of its first-ever 5G-enabled smartphone featuring its in-house chip (Mate 60 Pro) and the introduction of its new Pura 70 lineup.

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  • Apple China iPhone Sales Decrease by 19%, Huawei’s Sales Up by 67%

    Apple China iPhone Sales Decrease by 19%, Huawei’s Sales Up by 67%

    In the initial quarter of 2024, Apple faced significant obstacles within the Chinese smartphone sector. While there was a global surge in smartphone shipments, Apple encountered a steep 19% decrease in iPhone sales in China, marking its weakest performance since 2020. Consequently, Apple’s market share fell from 19.7% to 15.7% compared to the previous year, positioning Apple in third place behind Vivo and Honor.

    Factors Leading to Decline

    The drop in iPhone sales can be attributed to several factors. One notable cause was a government prohibition on the use of Apple devices by employees, impacting the company’s sales. Moreover, the resurgence of Huawei Technologies presented a formidable challenge. Huawei witnessed a remarkable 69.7% increase in sales, primarily fueled by the successful launch of its high-end Mate 60 series, enabling Huawei to secure fourth place in market share at 15.5%.

    Challenges and Efforts

    Additionally, subdued demand for Apple products played a role in the sales decline. Despite endeavors to entice consumers through discount campaigns and subsidies amounting to 1,300 yuan ($180), Apple struggled to maintain its position in the fiercely competitive Chinese market.

    Prospects for Improvement

    Looking forward, there are indications of potential improvement for Apple in the upcoming second quarter of 2024. Analysts from Counterpoint Research foresee a potential momentum shift for iPhones, driven by the introduction of new color variants and aggressive sales strategies.

    As Apple grapples with intense competition and regulatory hurdles, its strategies in the following months will significantly impact its trajectory in one of the world’s largest consumer markets. The company’s adaptability and ability to innovate will be pivotal as it navigates the dynamic landscape of the Chinese smartphone industry.

    All eyes are now on Apple’s impending earnings report scheduled for May 2, as investors eagerly await insights into the company’s plans to tackle the challenges in China. Apple’s responses and decisions in the face of these obstacles will be under close scrutiny by industry experts and consumers alike.

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  • Impressive Sales Surge in November 2023: Xiaomi’s Dominance in Chinese Smartphone Market

    Impressive Sales Surge in November 2023: Xiaomi’s Dominance in Chinese Smartphone Market

    Despite a global decline in smartphone sales, Xiaomi has once again demonstrated its dominance in the Chinese market. According to BCI, Xiaomi and its sub-brands, including Redmi, remained the top sellers in November 2023. The company sold approximately 5.2 million smartphones in the last month alone, registering a 44% growth on a year-on-year basis and allowing the electronics manufacturer to secure additional market share in China.

    Xiaomi’s Market Position

    Xiaomi ranked second in terms of sales in November 2023 in China. In the premium market segment, the company registered an 11.8% growth on a YoY basis. Overall, Xiaomi held 18.3% of the total smartphone market share, including sales from its subsidiaries. Apple remained at the top, while Honor achieved around 4 million smartphone sales, an increase of 12.6% on a YoY basis.

    Xiaomi vs. Apple

    In the last few days of November (Week 48 of the Year), Xiaomi even surpassed Apple with 78.2K shipments compared to Apple’s 78.9K. Although there is still a significant gap between Apple and Xiaomi sales when considering the entire month, Xiaomi appears to be catching up rapidly.

    Other Competitors

    Huawei and Vivo ranked fourth and fifth, respectively. Huawei also experienced exceptional 74% growth compared to the previous year. On the other hand, sales for Vivo declined, while those for OnePlus and Realme remained negative.

    Most brands experienced a busy November due to Double Eleven sales in China. It is hoped that the momentum will continue in December as the festive season and discounts persist.

    Conclusion

    In summary, Xiaomi’s strong performance in the Chinese smartphone market during November 2023 highlights its resilience and effectiveness in navigating challenging industry conditions. Despite a worldwide dip in smartphone sales, Xiaomi and its sub-brands, particularly Redmi, displayed impressive strength within their home market. Xiaomi’s continued momentum positions the company favorably for ongoing success in the highly competitive Chinese smartphone market.

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