Apple’s Rough Quarter In China Hit iPhone Sales Hard

Kenny Grant
February 14, 2019

Apple's iPhone shipments fell 19.9 percent during the fourth quarter in China, according to the latest figures from research firm IDC published Monday. Overall, Apple said iPhone revenue fell 15 percent. Therefore, in 2019, Apple may be more cautious with its buyers and will reportedly not increase the prices of the iPhones this year. IDC attributed the decline in iPhone sales in part to Apple's decision to raise prices on the product.

Apple is reportedly trying to address the price factor with discounts and carrier subsidies, but it remains to be seen how these efforts will reflect in terms of sales of the 2018 iPhone generation.

Meanwhile there is intense competition between major manufacturers like Apple and Samsung and with local vendors like Huawei, Xiaomi, Oppo and OnePlus.

Apple said its services division, which includes iCloud, the App Store and Apple Pay, saw revenue advance to $10.9 billion, up 19 percent over the prior year. But when it comes to India, there have been multiple reports that Apple may start manufacturing more smartphones in the country.

Apple blamed falling smartphone sales in China for its weaker than anticipated holiday earnings previous year, and now new data indicates that the iPhone suffered more than most in the East. The Chinese slowdown was also the driving factor behind Apple's first revenue outlook cut in nearly two decades.

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In recent times, many Chinese smartphone makers are adopting a two-brand strategy to cater to different customer segments. "China accounts for three in 10 of all smartphones sold worldwide, and it is a market Apple simply can not ignore", Neil Mawston of Strategy Analytics told China Daily. That's despite grappling with an unusually turbulent few months during which its finance chief was arrested on allegations of bank fraud, and the USA marshalled its allies to try and block the company from selling next-generation networking gear.

Lei Jun, Xiaomi's billionaire co-founder, is among those who expect the advent of 5G to energise demand.

China's smartphone market does not look bright this year, said Wang Xi, a China analyst at IDC.

"We've a long way to go before they become mainstream", IDC said.

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