This article is more than 1 year old

How do you like them Apples? Tim Cook's iPhones sitting in the tree, feeling unloved by the Chinese

Sales of Jesus mobe slump by double digits in Middle Kingdom

Apple's iPhone sales volumes in the strategic Chinese market slumped by double digits in Q4 – the firm's seasonally biggest quarter – as buyers opted for homegrown hardware makers' handsets.

CEO Tim Cook warned at the start of January that Cupertino's mobile phone revenue for Q1 of fiscal '19 ended 29 December were likely to be down 15 per cent, and so it proved when those numbers were filed.

Now Canalys has painted more colour on Apple's actual shipments: Apple sold 2.6 million fewer mobiles in China in the quarter, down almost 18 per cent to 11.5 million units. This was in a market that had declined 10.8 per cent to 100.7 million.

Mo Jia, analyst at the research house, told us that Apple had a "very aggressive line-up for its iPhone trio" and aimed for higher-priced bands.

"However, its volume driver, the entry iPhone XR, placed at CNY6,499 (£747.66), is within the range of premium smartphones. This mis-positioning failed to help Apple to hold up the volume.

"The older iPhone series 8, 7 and 6 also didn't help much on Apple's overall volume, which led to a significant decline," said Mo.

By contrast, the Chinese brands solidified their positions as the top three biggest makers in the country: Huawei was up 23.3 per cent to 30 million; Oppo – which launched the brand in the UK today – was up 1.1 per cent to 18.7 million; and Vivo was up 5.6 per cent to 18.5 million.

Below Apple was Xiaomi, the only other top-five seller to shrink, falling 28.3 per cent to 9.4 million sales. The Others section – made up of bit-part players and also-rans – was down 50.6 per cent to 12.5 million.

Wall Street analyst Bernstein last month warned about the potential size of inventory Apple is carrying in the channel (estimated at between 4 million and 5 million) as it exited its peak sales quarter, though Apple has already started to cut prices in emerging markets to see if it can tempt buyers to part with their cash, making Tim Cook's claims that the latest flagship models are the best the company has "ever shipped" sound a little hollow.

Cook and co did admit last autumn that replacement cycles had elongated by three to four months, a trend that is clearly not exclusive to Apple, and blamed the battery replacement programme for lost sales and new phones.

One factor outside of Apple's control is the ongoing trade tariff war between the US and China administrations, with the potential to negatively impact sentiments toward western brands in the Middle Kingdom and vice versa.

Mo at Canalys agreed "trade tensions" are "one of Apple's major risks in China", noting that several local media agencies had reported on Apple in a – gasp – negative way. And we all know how Apple views publications that don't toe the corporate line. ®

More about

TIP US OFF

Send us news


Other stories you might like