Apple's iPhone Sales in China Down an Estimated 30% in Q1 2019, Huawei Continues to Dominate

[MacRumors]

Apple's iPhone sales in China were down 30 percent during the first quarter of 2019, according to new shipment estimates shared today by Canalys.

Apple shipped an estimated 6.5 million iPhones during the quarter, marking its worst decline in two years. It shipped fewer smartphones in the country than Chinese vendors Xiaomi, Vivo, Oppo, and Huawei, coming in as the number five brand in China.

Huawei, the top vendor in China during Q1 2019, shipped 29.9 million smartphones for 34 percent market share. Huawei saw impressive growth during the quarter, with smartphone sales up 41 percent. Other smartphone vendors in China also saw drops in smartphone sales, though not as dramatic as Apple's decline.

Apple held just 7.4 percent market share in China during Q1 2019, down from 10.2 percent in the year-ago quarter. According to Canalys analyst Mo Jia, introducing features like 5G is "vital" to prevent iPhone demand in China from shrinking even further.

Apple's performance in China is concerning, given that the worst quarter for iPhone shipments is usually Q2 or Q3, not Q1 when new devices are still fresh. Apple has acted to cut iPhone retail prices, which has largely relieved the pressure from its channel partners. Despite the iPhone's installed base in China being well over 300 million, it is vital that Apple prevents users deserting it for Android vendors. Apple faces a challenge in China to localize its software and services offerings as quickly as in Western markets. Its hardware is therefore more exposed to competition in China than elsewhere. Bringing up-to-date features, such as 5G, next year, as well as localized software is vital to prevent demand shrinking further.

Overall smartphone shipments in China fell to 88 million units, the market's worst performance since 2013 and a three percent drop from the year-ago quarter. Huawei managed significant growth in China through increased investments in brick and mortar stores, a wider offering of consumer IoT devices, and penetration of rural markets with low cost smartphones.

Apple is set to announce its earnings results for the second fiscal quarter of 2019 (first calendar quarter) this afternoon. Apple is expecting revenue between $55 billion and $59 billion, a decline from the $61.1 billion reported in 2018.

Apple is no longer disclosing iPhone, iPad, and Mac sales, which means there is no longer access to specific sales data to confirm analyst estimates.

Article Link: Apple's iPhone Sales in China Down an Estimated 30% in Q1 2019, Huawei Continues to Dominate

 

[33man]

Not a surprise. Competitors does better camera in low light and so... Better screen... Better autonomy, cheaper... And include fast charger...

Apple is seriously in trouble if they keep putting all their effort in phones only and don't update their mac and keyboards soon...

 

[Pelea]

I dont think there’s any proof that apple has been selling less iPhones this year than other years. In fact they’re selling More iPhones now than ever!

 

[Cosmosent]

RE: "Apple is no longer disclosing iPhone, iPad, and Mac sales, which means there is no longer access to specific sales data to confirm analyst estimates."

It's now harder to figure-out, but NOT impossible !

 

[dominiongamma]

Not a surprise. Competitors does better camera in low light and so... Better screen... Better autonomy, cheaper... And include fast charger...

Apple is seriously in trouble if they keep putting all their effort in phones only and don't update their mac and keyboards soon...

Apple has the privacy issue on its side, but more and more people don’t care about that issue it seems. People want cheap and free even it means selling their personal information

 

[pallymore]

They cut prices (through various sales) in China a couple of times - I guess that didn't help too much.

Android phones are getting better in terms of performance / value, and iPhones are simply too expensive if you look at the average income numbers. On average a Chinese person living in China makes about 20% of what an average American does while the iPhone costs a bit more in China due to high taxes.

 

[chekie]

No worries people. Apple's profit is probably still growing despite of decreasing revenue. But I wonder how long that will last.

 

[Agit21]

Good news. Chinese are not dumb to pay that insane Apple tax.
Suck that Tim!

 

[Baymowe335]

We'll see today in the Apple earnings.

China was a $52B business for Apple is 2018, so save your doom and gloom guys. It was still up 20% y/y.

 

[nwcs]

The Chinese people are buying phones made by Chinese brands. How unremarkable. The only question is how many backdoors are provided to the government.

 

[TheAustrianGuy]

Tim‘s in real trouble now.

 

[dominiongamma]

Tim‘s in real trouble now.

How? Profits are up and iPhones are still selling well.

 

[PickUrPoison]

Not a surprise. Competitors does better camera in low light and so... Better screen... Better autonomy, cheaper... And include fast charger...

Apple is seriously in trouble if they keep putting all their effort in phones only and don't update their mac and keyboards soon...

Better screen? Doubtful. Autonomy is what sells in China? Nah. And I’m sure the charger makes a big difference.

btw which Mac needs to be updated to keep Apple from being “seriously in trouble”?

Try again.

 

[Analog Kid]

Apple shipped an estimated 6.5 million iPhones during the quarter

You might want to be clearer that this number is only for China...

 

[realtuner]

Meaningless numbers.

You need to break out market share by price of the device. All those companies listed still sell primarily low-end devices and not flagships that compete with the iPhone.

 

[AxiomaticRubric]

Not a surprise. Competitors does better camera in low light and so... Better screen... Better autonomy, cheaper... And include fast charger...

Apple is seriously in trouble if they keep putting all their effort in phones only and don't update their mac and keyboards soon...

Macs will never come close to matching iPhone revenue.

The bigger issue is how Apple suppliers and contracted manufacturers have been treating the Chinese people.

 

[Baymowe335]

Instead of speculating, let's look at China fact. Notice China up 16% y/y? China had a bad Q1 in 2019, but it's not a trend yet. Let's wait until Apple reports this afternoon before we start the doom and gloom. If you read the chart posted in this thread, you would have thing China fell off in 2013 and never recovered.

 

[dumastudetto]

The Chinese people are not stupid. They want the best products. There's no way iPhone sales have plummeted by anything like 30% in China. Apple is still the industry leader and the Chinese people know it.

 

[PickUrPoison]

They cut prices (through various sales) in China a couple of times - I guess that didn't help too much.

Android phones are getting better in terms of performance / value, and iPhones are simply too expensive if you look at the average income numbers. On average a Chinese person living in China makes about 20% of what an average American does while the iPhone costs a bit more in China due to high taxes.

The average-income Chinese consumer doesn’t buy Apple, they buy a $50-100 Huawei/Oppo/ Vivo.

At this point, I’m sure everyone realizes that Apple doesn’t participate in that market at all. They have exactly a 0% market share of smartphones under $600-700. That has a tendency to pull down their overall market share percentage. It’s really just simple math.

 

[Baymowe335]

The Chinese people are not stupid. They want the best products. There's no way iPhone sales have plummeted by anything like 30% in China. Apple is still the industry leader and the Chinese people know it.

Right. This research is talking about overall smartphone shipments. Apple grew China 16% y/y and was $52B in 2018. Hardly struggling.

 

[I7guy]

Samsung already took a bath. Hopefully the business in China is the only issue.

 

[cardfan]

I think it’s a matter of people want premium hardware for the price. The XS Max could’ve been better. Instead it’s merely a bigger XS.

That cuts both ways though. Many on here don’t want the bigger version having better features. So the Max is gimped.

 

[JRobinsonJr]

Just speculating... I do not have a real answer

This is likely a combination of factors. Price? Yep. Features? Sure. Nationalism? Likely.

I do know (via information on the automotive industry) that the Chinese market wants the coolest, newest wiz-bang features. Price is less of an issue. Being "cool" is the most important. Case in point, there is a 3rd party company in China that will completely remove a vehicles dashboard and replace it with a 47" ultra-ultra-ultra-wide touch-screen. Doesn't integrate particular well, but it looks freakin awesome.

So, my question is... how much is Apple losing by being cautious?

 

[Baymowe335]

They cut prices (through various sales) in China a couple of times - I guess that didn't help too much.

Android phones are getting better in terms of performance / value, and iPhones are simply too expensive if you look at the average income numbers. On average a Chinese person living in China makes about 20% of what an average American does while the iPhone costs a bit more in China due to high taxes.

The price cuts happened only this quarter, which will be announced today. We will see ACTUALS of how well China did in about 2 hours...so no need to make stuff up.

Stop spreading nonsense. Apple grew China to $52B in 2018, up 16% from 2017...yes, ACTUALLY.

 

[Analog Kid]

Android phones are getting better in terms of performance / value, and iPhones are simply too expensive if you look at the average income numbers. On average a Chinese person living in China makes about 20% of what an average American does while the iPhone costs a bit more in China due to high taxes.

If it were purely an iPhone/Android issue, you’d see Samsung somewhere on that list. I don’t think we can discount the lean toward Chinese companies.

This is bad news for Apple, but really bad news for Samsung. Samsung needs to compete head to head with these companies for a slice of the Android market globally with little barrier to adoption.