As competition in the Chinese smartphone market intensifies, the iPhone maker finds it harder than before to grow its sales in the country
Tech giant Apple Inc. (NASDAQ:AAPL) continues to face trouble in retaining its growth story. By the looks of it, the situation isn’t getting any better for the iPhone maker. For the quarter ended June 30, 2016, the $589 billion company posted a 33% year-on-year decline in revenue from Greater China, including the mainland, Hong Kong, and Taiwan. This is quite alarming for investors, given that after its primary market, the US, China was supposed to serve as the next high-growth smartphone market for Apple. However, that is no longer the case.
Apple is no longer delighting the Chinese consumer. While it was seen as a “status symbol” for consumers in China when it launched 13 years ago, that is no longer the case. Majority of consumers in the country have smartphones made by local competitors such as Huawei and Xiaomi, which offer equally good alternatives at cheaper prices.
The iPhone maker promoted its smartphone, for years, as a highly innovative device. Over the years, rivals caught up with the features, and Apple failed to keep innovating. Now, the company is set to launch the next-generation iPhone this fall. While rumors suggest the device would have two front cameras, that is hardly a surprise anymore, given that Huawei’s P9 and Xiaomi’s Redmi Pro both of wich have already been launched have dual-lens.
Based on the fact that up till the second quarter of fiscal year 2016 China remained Apple’s fastest-growing market, the company needs to act fast to make amends. It has also had its iTunes service banned in China, and has also faced a lawsuit in which a Chinese company accused it of misusing the iPhone trademark.
According to research group Canalys, the top three smartphone brands in China include Oppo, Vivo, and Huawei. Market research firm Counterpoint Technology said that Oppo bagged the top rank with a 22% market share for the second quarter. According to Canalys, Apple ranked fifth in this race, with a 9% share, with Samsung ranking sixth. The firm also said that the Chinese smartphone market grew 3% over the quarter.
IDC analyst Bryan Ma believes Chinese consumers are very indecisive, and they get tired of technology much sooner than the average consumer. Another problem that has worried Apple investors is that leaked iPhone 7 images show that it does not differ incrementally from the iPhone 6S.
It appears that Apple’s woes in Chinas are only about to worsen. The Country Caller will continue to update you on the relevant developments.