Apple’s iPhone shipments plunge in China as Huawei tightens grip

Roman Schwartz
February 14, 2019

The steep decline contributed to Apple's disappointing earnings report last month and a 15% drop in global iPhone sales in the December quarter.

A report released by IDC on Monday showed that Apple's shipments in China fell by 19.9% in the fourth quarter, but its ranking in smartphone shipments rose from fifth to fourth.

Both Apple and Xiaomi have been hit by a slump in smartphone shipments in China during the last quarter to become the two worst performing smartphone vendors in the country.

During the period, the US tech titan reported revenue of $84.3 billion, which represented a 5% total decline - and a 15% decline in iPhone revenue - year-over-year.

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It's not yet clear how Apple will attempt to reverse falling iPhone demand in 2019, though the company is expected to cut costs and rethink prices for this year's refresh. A slowing economy, lengthening replacement times and the iPhone's hefty price tag contributed to the United States giant's decline, IDC said according to a Bloomberg report said.

Its single-digit market share paled in comparison to the industry's four biggest players in China: Huawei, Oppo, Vivo and Xiaomi, which came in fourth with a 13.1 percent share.

In early January, Apple CEO Tim Cook warned the deceleration in China would undercut sales, leading to the company's first revenue outlook cut in nearly two decades. Still, Apple underperformed the market. "Apple didn't seem to change its Chinese marketing plans". Cook, however, emphasised the long haul, highlighting 19 per cent growth in services revenue, the Bloomberg report said. "China accounts for three in 10 of all smartphones sold worldwide, and it is a market Apple simply can not ignore", Neil Mawston of Strategy Analytics told China Daily. It shored up its lead after unit shipments soared 23.3 per cent in the December quarter, leading all major brands, according to IDC. The argument is that consumers will get hooked once they experience first-hand phones with data speeds more than 10 times faster than today's devices.

IDC said the market outlook for this year is not optimistic, and that competition for customers will be severe.

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