Apple Loses Fourth Place to Xiaomi in Booming China Smartphone Market

[MacRumors]

Apple has fallen to fifth place in China's booming smartphone market, where combined sales reached 131.6 million units in the fourth quarter of 2016, accounting for nearly a third of worldwide shipments. The Q4 figure confirmed the highest ever annual amount of smartphones sold in China, according to market research firm Canalys, with shipments for the year reaching 476.5 million units, rising 11.4 percent from 2015 levels.

Huawei shipments of 76.2 million units took the top spot in China's smartphone market in 2016, followed by Oppo with 73.2 million units and Vivo with 63.2 million. Apple meanwhile shipped 43.8 million units, down 18.2 percent year on year, influencing the company's 7 percent decline in global shipments compared to 2015. Apple also lost fourth place to Xiaomi, despite the Chinese maker also experiencing declines in the country.

Xiaomi became number four in the China smartphone market, while Apple fell to fifth place. Xiaomi shipped a total of 51.4 million units of smartphones with a 21 percent year-on-year decline, while its market share decreased from 15.2 percent in 2015 to 10.7 percent in 2016, the lowest since 2013. Apple shipped 43.8 million units of iPhones throughout the year, a year-on-year decrease of 18.2 percent.

Huawei's success in China continued apace on the strength of its flagship products, said Canalys research analyst Jessie Ding. "While Apple, Samsung and Xiaomi are all in the process of adjusting their strategies in China, Huawei took the opportunity to consolidate its position in the tier-1 and -2 cities." The lull also allowed Huawei to attack Oppo and Vivo's backyard "in tier-three and tier-four cities," Ding noted.

Last year Apple experienced its first ever year-over-year decline in the Chinese smartphone market, with the company's phones continuing to be outpaced by cheaper alternatives and the iPhone 7 failing to kick up a frenzy among consumers compared to previous launches, according to analysts.

Apple faced a similar story at the beginning of the current year. Despite recording record results, Apple's Q1 2017 earnings call revealed revenue was down 8 percent in China, but CEO Tim Cook claimed half of that decline was down to currency devaluation. Cook said that while China was "not without challenges", he remained "encouraged by improvements" going into the second quarter.

Analysts have previously suggested that Apple's decline in China has been compounded by loyal users taking a year off upgrading in 2016 in anticipation of 2017's "iPhone 8". If so, Apple's success there depends on whether the upcoming phone can live up to the hype.

"China and Hong Kong are still the hardest-hit areas in Apple's global top ten market," according to Ding. "The outlook remains bleak for Apple to get its China performance back to its heyday of 2015. As with consumers in other developed markets, China's consumers are awaiting the 10th anniversary of the iPhone with very high expectations."

Article Link: Apple Loses Fourth Place to Xiaomi in Booming China Smartphone Market

 

[Telos101]

Why do I get the feeling the iPhone 8 won't live up to expectations?

 

[zzLZHzz]

Those china phone are so cheap, I could have buy a few of that for the price of 1 iPhone, obviously Apple can't beat those raw numbers. But per device revenue, iPhone is still one of the top.

Could get those china phone as burner-phone and throw away if damaged.

 

[radus]

As far as I know People in China rather buy Chinese products. Apple will loose this market.
Who are the owners of these Chinese companies ?

 

[Aussi3]

Bring on iPhone 8!! I want it now

 

[Zirel]

As far as I know People in China rather buy Chinese products. Apple will loose this market.
Who are the owners of these Chinese companies ?

Chinese rather buy Chinese products?

The Chinese are the people that like imported goods the most. And extremely Brand-aware!
[doublepost=1487421322][/doublepost]

Apple has fallen to fifth place in China's booming smartphone market, where combined sales reached 131.6 million units in the fourth quarter of 2016, accounting for nearly a third of worldwide shipments. The Q4 figure confirmed the highest ever annual amount of smartphones sold in China, according to market research firm Canalys, with shipments for the year reaching 476.5 million units, rising 11.4 percent from 2015 levels.

Huawei shipments of 76.2 million units took the top spot in China's smartphone market in 2016, followed by Oppo with 73.2 million units and Vivo with 63.2 million. Apple meanwhile shipped 43.8 million units, down 18.2 percent year on year, influencing the company's 7 percent decline in global shipments compared to 2015. Apple also lost fourth place to Xiaomi, despite the Chinese maker also experiencing declines in the country.

Huawei's success in China continued apace on the strength of its flagship products, said Canalys research analyst Jessie Ding. "While Apple, Samsung and Xiaomi are all in the process of adjusting their strategies in China, Huawei took the opportunity to consolidate its position in the tier-1 and -2 cities." The lull also allowed Huawei to attack Oppo and Vivo's backyard, "in tier-three and tier-four cities," Ding noted.

Last year Apple experienced its first ever year-over-year decline in the Chinese smartphone market, with the company's phones continuing to be outpaced by cheaper alternatives and the iPhone 7 failing to kick up a frenzy among consumers compared to previous launches, according to analysts.

Apple faced a similar story at the beginning of the current year. Despite recording record results, Apple's Q1 2017 earnings call revealed revenue was down 8 percent in China, but CEO Tim Cook claimed half of that decline was down to currency devaluation. Cook said that while China was "not without challenges", he remained "encouraged by improvements" going into the second quarter.

Analysts have previously suggested that Apple's decline in China has been compounded by loyal users taking a year off upgrading in 2016 in anticipation of 2017's "iPhone 8". If so, Apple's success there depends on whether the upcoming phone can live up to the hype.

"China and Hong Kong are still the hardest-hit areas in Apple's global top ten market," according to Ding. "The outlook remains bleak for Apple to get its China performance back to its heyday of 2015. As with consumers in other developed markets, China's consumers are awaiting the 10th anniversary of the iPhone with very high expectations."

Article Link: Apple Loses Fourth Place to Xiaomi in Booming China Smartphone Market

That really must be right... /s

Xiaomi is losing sales for the third consecutive year, and Apple in selling more iPhones than before...

But someone will eat up that """"data""""

 

[JosephAW]

The iPhone is not for everyone, it's for those who want the best phone.

 

[69Mustang]

Chinese rather buy Chinese products?

The Chinese are the people that like imported goods the most. And extremely Brand-aware!

Yup. It's the government that wants the people to buy local.

That really must be right... /s

Xiaomi is losing sales for the third consecutive year, and Apple in selling more iPhones than before...

Where are you getting this? iPhone sales fell in China. It's right in the article. Are you saying the article is untrue?

 

[zzLZHzz]

Chinese rather buy Chinese products?

The Chinese are the people that like imported goods the most. And extremely Brand-aware!
[doublepost=1487421322][/doublepost]

That really must be right... /s

Xiaomi is losing sales for the third consecutive year, and Apple in selling more iPhones than before...

But someone will eat up that """"data""""

That right. Tons of them goes to Japan, Korea to buy Chinese products because they deemed that the Japan/Korea government has better quality check than their own country.

 

[69Mustang]

The iPhone is not for everyone, it's for those who want the best phone.

The iPhone is not for everyone, it's for those who want an iPhone. Fixed that for ya.

 

[DEMinSoCAL]

Those china phone are so cheap, I could have buy a few of that for the price of 1 iPhone, obviously Apple can't beat those raw numbers. But per device revenue, iPhone is still one of the top.

Could get those china phone as burner-phone and throw away if damaged.

Not all the China phones are cheap. There are higher-end phones that are full spec phones with all the features you want. The difference? They aren't selling them at 50% profit margin, and those companies don't maintain billions of dollars cash made off their high profit margins. Apple COULD beat those numbers if their phones weren't upwards of $1000 USD.
Look around and see what some of these Chinese companies are offering for a couple hundred bucks. Phones with features that you'll not find even in Apple phones. It's actually pretty amazing what you can get for a few hundred dollars.

 

[MrNomNoms]

That really must be right... /s

Xiaomi is losing sales for the third consecutive year, and Apple in selling more iPhones than before...

But someone will eat up that """"data""""

End of the day the marketshare doesn't matter when there is a race to the bottom between the other vendors slitting each others throats whilst Apple runs off with 90% of the profit - Apple is smart not engaging in the race to the bottom in favour of preserving the brand. Eventually those buying the low end phones will want to upgrade to Apple which has the status that comes with owning a foreign brand - why destroy your brand for temporary short term marketshare when you can play the long game?

 

[hellopupy]

As far as I know People in China rather buy Chinese products. Apple will loose this market.
Who are the owners of these Chinese companies ?

Means you don't know much. Apple products are too expensive for Chinese right now, most Chinese still don't have the disposable income for Apple to be #1 right now.

 

[MacBH928]

What makes China on the opposite of the world opt for Oppo and Vivo while everyone else is using either a Samsung or iPhone and the new comer Pixel. Also they don't have Samsung?!

Those china phone are so cheap, I could have buy a few of that for the price of 1 iPhone, obviously Apple can't beat those raw numbers. But per device revenue, iPhone is still one of the top.

Could get those china phone as burner-phone and throw away if damaged.

I looked up huwawie and Oppo they are around $400-$600 range. Seems similar to iphone.

 

[FixOrr]

It seems everybody has missed a very important point, subtle but incredibly important. For those who have never worked or lived in Asia this will sound strange but the number '7' is bad (bad unlucky in the asian psyche) whereas the number 8 is good (incredibly lucky). So If Apple focus on the number '8', I predict a large growth in Asian sales and riot in the shops.

 

[8012R3]

The iPhone is not for everyone, it's for those who want the best most expensive phone.

 

[newdeal]

Why do I get the feeling the iPhone 8 won't live up to expectations?

I am pretty worried this is going to be like that teardrop shaped iphone that everyone wanted when the iphone 5 was rumoured and then we got the iphone 5 instead. Everyone thinks we are getting this awesome iphone 8 and if Apple releases the 7S instead they are really crapping their bed

 

[Stella]

It seems everybody has missed a very important point, subtle but incredibly important. For those who have never worked or lived in Asia this will sound strange but the number '7' is bad (bad unlucky in the asian psyche) whereas the number 8 is good (incredibly lucky). So If Apple focus on the number '8', I predict a large growth in Asian sales and riot in the shops.

Many companies would take this into consideration, they will skip version 4 and 7.

Apple didn't obviously have the foresight to change the version number.

If Asian markets are so important to them, what were they thinking?

 

[FixOrr]

Many companies would take this into consideration, they will skip version 4 and 7.

Apple didn't obviously have the foresight to change the version number.

If Asian markets are so important to them, what were they thinking?

Exactly and I would like to quote Forest Gump here: "Stupid is as Stupid does"

 

[MH01]

Not surprised . Myself, an upgrader each generation to the top model stopped at 6S , no longer see the value , given the small incremental upgrades and rising prices .

 

[Winni]

The iPhone is not for everyone, it's for those who want the best phone.

You are entitled to your personal beliefs. But it's just that: A personal belief. The iPhone with its crippled OS is the last phone that I would buy. Huawei and several other companies offer a much better value. And after all, smartphones are just consumer products with an extremely short lifecycle.

 

[cwt2nospam]

Is it really too much to ask that a site that's been covering Apple for many years — as MacRumors has — show some understanding that marketshare is truly a second order consideration for any business? To say that "Apple has fallen to fifth place" and then compare their shipments to those of companies that are losing money and have been for years shows a profound lack of business sense. Running your competition into the ground is the opposite of losing.

https://techcrunch.com/2016/11/25/xiaomi-admits-it-doesnt-make-money-on-smartphone-hardware-sales/
Note that Apple makes money selling the phone and from multiple after purchase revenue streams.

 

[Juicy Box]

As far as I know People in China rather buy Chinese products.

In my experience, the opposite is true.

There are a lot of tours for foreign vacationers that stop by a near-by shopping center. Many of these tour busses are exclusively for Chinese visitors. They will go into the stores, look for items, search all over the box to see where they were made. If they can't figure it out, they would ask someone working in the store where it was made. If it was made in China, they wouldn't buy it. Anywhere else was okay.

I personally think that textiles are good quality in China, but I wouldn't trust electronics if they were made with Chinese parts.

Chinese rather buy Chinese products?

The Chinese are the people that like imported goods the most. And extremely Brand-aware!

That right. Tons of them goes to Japan, Korea to buy Chinese products because they deemed that the Japan/Korea government has better quality check than their own country.

In my experience, this is all true.

 

[cwt2nospam]

The iPhone with its crippled OS is the last phone that I would buy.

And that's just your opinion. IOS is the only phone OS I'd trust to do my banking, and that's a major reason for buying a smartphone. For example, Google's business model (mining your data to monetize it) guarantees that Android will never be secure enough to use for checking my balance, let alone making payments of any kind. Then there's the fact that 99% of Android phones are not using the latest version of the OS and can't upgrade because their phone company won't let them. Talk about crippled! Old versions have the most known security issues, so upgrading to the latest version is critical if you want your phone to be truly useful.

 

[macfacts]

End of the day the marketshare doesn't matter when there is a race to the bottom between the other vendors slitting each others throats whilst Apple runs off with 90% of the profit - Apple is smart not engaging in the race to the bottom in favour of preserving the brand. Eventually those buying the low end phones will want to upgrade to Apple which has the status that comes with owning a foreign brand - why destroy your brand for temporary short term marketshare when you can play the long game?

I'm guessing you're an Apple investor.