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Apple and iPhone 7 Continue to Be Outpaced by Lower-Cost Smartphone Brands in China

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Apple remained the fourth largest smartphone vendor in China in 2016, beaten out by Oppo, Huawei, and Vivo in first, second, and third places, respectively, according to new data from research firm IDC. As a whole, IDC said it was a good year for the smartphone market in China, which saw a 19 percent year-over-year growth in 2016, and a 17 percent quarter-over-quarter growth in the fourth quarter of the year.

Unfortunately for Apple, 2016 also represented its first ever year-over-year decline in the Chinese smartphone market. IDC noted that the new iPhone 7 debut "did not create as much of a frenzy compared to the past" launch of other iPhone models, but the firm doesn't think that vendors like Oppo, Huawi, and Vivo are stealing Apple's market share away. IDC believes that most of Apple's loyal Chinese users simply took an off year in 2016 in anticipation of 2017's "iPhone 8."

2016 was the first time ever that Apple saw a YoY decline in the PRC market. Even though the new black colored iPhones caught the attention of consumers, overall, the new launches did not create as much of a frenzy compared to the past.

Despite the decline, IDC does not believe Chinese vendors have actually eaten away Apple's market share. Most Apple users are expected to be holding out for the new iPhone that will be launched this year, and that will help the brand to see a growth in 2017. Apple's 10-year anniversary iPhone will also likely attract some of the high-end Android users in China to convert to an iPhone.
The overall growth in the smartphone market in China is said to be fueled by an "increased dependence on mobile apps" that led to consumers seeking device upgrades. Even in lower tiered cities, users sought out upgrades, which Apple's iPhone was too high-priced to justify. Instead, Oppo and Vivo "aggressively pushed mid-range smartphones in these cities," according to Tay X iaohan, IDC senior market analyst.


The last note in the research firm's report focused on the slowdown of online shopping in 2016, with companies shifting to bolster their brick-and-mortar retail presence in China. This includes Xiaomi -- ranking as the fifth largest smartphone vendor -- which opened new Mi Home stores throughout the year to drive retail growth. "Apple has also been aggressive in increasing its offline retail presence," according to IDC. Just last month Apple launched its seventh retail location within Shanghai, China.


One of Apple's biggest achievements in China is the App Store. In the third quarter of 2016, the country became the number one largest market in the world for App Store revenue on iOS devices, according to App Annie. Otherwise, Apple has been slowly losing market share in China for a while, with Europe last summer regaining its position as Apple's second biggest market after the United States and ahead of China.

Article Link: Apple and iPhone 7 Continue to Be Outpaced by Lower-Cost Smartphone Brands in China
 

Sasparilla

macrumors 68000
Jul 6, 2012
1,506
2,422
In a country where the average wage is a pittance of what it is in the Western World, that vendors with much cheaper handsets (and links with the country's authoritarian government) are grabbing market-share as more and more of the population buys mobile handsets is not a surprise. JMHO...
 

Fzang

macrumors 65816
Jun 15, 2013
1,314
1,081
For all those about to make sweeping generalizations of ~half the world's population, remember that a small-percentage middle-class-and-above is still millions and millions of people who can easily afford an iPhone, just like you and I.
 

Avieshek

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Dec 7, 2013
701
1,128
India
I never understood how a phone that is expensive to most of us in the west is affordable in countries like China or India.

Considering what the annual wage is in India how can an iPhone of any description be affordable?

If the average income for example, say, is $5 in a country like India according to analysts, it doesn't mean every single citizen is earning $5s.
On the other hand, the number of millionaires (and if not, than those high-middle classes with $200,000 should also be able to afford an iPhone) are more than the population of a US high class citizen ever can be.
Same goes for China, the other highly populated land.
 
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nocturnum

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Feb 8, 2014
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I never understood how a phone that is expensive to most of us in the west is affordable in countries like China or India.

Considering what the annual wage is in India how can an iPhone of any description be affordable?

China has roughly 1.400.000.000 people. If 5% has decent wages, this means 70.000.000 potential customers. Get it?
 

coolfactor

macrumors 601
Jul 29, 2002
4,781
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Vancouver, BC
I never understood how a phone that is expensive to most of us in the west is affordable in countries like China or India.

Considering what the annual wage is in India how can an iPhone of any description be affordable?

Apple may be an exception, but products are quite often priced for the market. In my opinion, prices here in the Western World are too high in many cases, and a lot of that has to do with wasteful practices and unions. People that fight for higher wages from one source, rather subsidize their income from multiple sources, ignore the fact that higher wages actually increase costs for everybody. At the end of the day, it doesn't really help anybody.
 

Fzang

macrumors 65816
Jun 15, 2013
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People that fight for higher wages from one source, rather subsidize their income from multiple sources, ignore the fact that higher wages actually increase costs for everybody. At the end of the day, it doesn't really help anybody.

Well, generally people fight for better terms, not just wages. I'd go out on a limb and say that it has helped everybody since the Industrial Revolution.
 
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macfacts

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Oct 7, 2012
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The problem is no iPhone upgrade program in China. No ez lay away pay. That's how Apple sells so many in the West.
 

TallManNY

macrumors 601
Nov 5, 2007
4,367
1,220
China has roughly 1.400.000.000 people. If 5% has decent wages, this means 70.000.000 potential customers. Get it?

And even if that 5% doesn't at first blush seem to make that much each year, the cost of living is much lower. You can make $100,000 a year in China and that means you can have a full-time maid/cook. When food and other daily expenses are really cheap, you can splurge on stuff like an iPhone if you want.
 

kdarling

macrumors P6
And Samsung disappeared from the top 5 in China. Who could have told this based on the declarations of the "analysts" one or two years ago ? ;)

That's true, and a good example of how quickly things can change.

Apparently the Chinese makers that popped to the top, did so partly because most sales are still done in person at a store, and those makers put a lot of effort into helping stores with custom displays and assistance, building a broader distribution system, and giving more sales bonuses and discounts.

Ironically, pretty much the same things that Samsung did a few years ago so successfully in the US and India and other places.
 

macTW

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Oct 17, 2016
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I doubt Apple cares at all about this. They don't cater to the low end phone market. If you're set on buying cheap, Apple isn't for you, and they know that and don't care. The SE is the cheapest they'll get and they're fine with missing out on that market segment.
 

Mr. Dee

macrumors 68030
Dec 4, 2003
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A reporter questioned some Chinese shoppers in an Apple store early last year and asked them about purchasing an iPhone. Most said, they are really nice and if they had the money, they would, but they are just expensive when they can purchase something cheaper that does pretty much the same thing.

For the Chinese shopper, its called being practical. For me personally, I bought a 6s in 2015 and it was really expensive. Its more than enough for what I need out of a phone. Not until stops working or Apple no longer supports it with new iOS updates will I consider a new iPhone. I still own a iPod Touch (2009) I still use up to this day. The last version of iOS to support was version 5.
 

Zirel

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Jul 24, 2015
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Thing is that people buy iPhones because they want that big resounding Apple logo and get the best phone in the market.

People buy those China Androids because they don't care which logo it has and get the best bang/buck there, which isn't that much better than the iPhone SE.

The problem in this is that next year Apple will still be Apple, the iPhone always proved to be an excellent product (how many iPhone 5s, a 3 year and half phone are out there alive and kicking ass and how many Samsung S4?).

While the Chinese, I said it 2-3 years ago when Xiaomi and Lenovo were in the news, people are loyal to the price, not to the brand, as soon as they start to even *try* to make money, they will get disrupted by the newest upstart wanting to take their place.

First was Xiaomi and Lenovo, now is Oppo (OnePlus) and Huawei, next it will be UMI and someone else...

Their products are not differentiated.
 

macs4nw

macrumors 601
I never understood how a phone that is expensive to most of us in the west is affordable in countries like China or India.

Considering what the annual wage is in India how can an iPhone of any description be affordable?
China and India equally, are countries where social status is highly regarded, much more so than in the West, and people will literally cut down on everything else to afford luxury goods and be able to announce to the world that they are 'of means'. You see it here too, but to a lesser extent.

Also, China is no longer the rural, peasant society it once was. The industrial and manufacturing revolution that has occurred there has produced a surging middle class that now has disposable income beyond life's necessities.
 
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jdclifford

macrumors 6502a
Jul 26, 2011
526
763
I never understood how a phone that is expensive to most of us in the west is affordable in countries like China or India.

Considering what the annual wage is in India how can an iPhone of any description be affordable?
It's called "brainwashing". I have an iPhone 7 but I eat dirt 3X a day. Crazy.
 
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Analog Kid

macrumors 603
Mar 4, 2003
5,553
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Apple may be an exception, but products are quite often priced for the market. In my opinion, prices here in the Western World are too high in many cases, and a lot of that has to do with wasteful practices and unions. People that fight for higher wages from one source, rather subsidize their income from multiple sources, ignore the fact that higher wages actually increase costs for everybody. At the end of the day, it doesn't really help anybody.
You aren't quite following the price-wage cycle all the way around. Higher wages also mean more customers for a product.

Wages should track productivity. If they did, then everyone contributing to growth would enjoy a better standard of living. The problem is that wages stopped tracking productivity sometime in the early 80's. A lot of that has to do with overvaluing capital, undervaluing the social dividends from accumulated knowledge, and the decline of unions.
 
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tongxinshe

macrumors 6502a
Feb 24, 2008
854
390
Thing is that people buy iPhones because they want that big resounding Apple logo and get the best phone in the market.

People buy those China Androids because they don't care which logo it has and get the best bang/buck there, which isn't that much better than the iPhone SE.

The problem in this is that next year Apple will still be Apple, the iPhone always proved to be an excellent product (how many iPhone 5s, a 3 year and half phone are out there alive and kicking ass and how many Samsung S4?).

While the Chinese, I said it 2-3 years ago when Xiaomi and Lenovo were in the news, people are loyal to the price, not to the brand, as soon as they start to even *try* to make money, they will get disrupted by the newest upstart wanting to take their place.

First was Xiaomi and Lenovo, now is Oppo (OnePlus) and Huawei, next it will be UMI and someone else...

Their products are not differentiated.

No, Huawei is very different from all of the other Chinese phone makers. It's likely it will eventually be a real challenger to Samsung and Apple.
 

Zirel

Suspended
Jul 24, 2015
2,196
3,008
No, Huawei is very different from all of the other Chinese phone makers. It's likely it will eventually be a real challenger to Samsung and Apple.

You don't need to teach me what Huawei is, thank you.
 
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