China smartphone market to continue contracting in 1Q19, says Digitimes Research

Andrew Cummings
February 14, 2019

In response, the company has announced that it will be introducing price cuts to markets which have been affected by a stronger USA dollar with China likely being one of these markets given that third-party retailers such as are already selling iPhones at 20% lower prices.

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. "It also seemed to be slow in reacting to China's economic slowdown and changes in consumption structure".

In the final three months of 2018, shipments of Apple's iPhone dropped 19.9 percent year-over-year while Xiaomi saw its shipments slashed by more than a third compared to the same period a year earlier.

IDC said the iPhone's high price specifically "led to the decline of Apple's domestic market", while the increased strength of Huawei's brand and its flagship phone's "excellent technology'" helped it continue to widen the gap over Apple.

Apple still relies on China to produce many of its products, so it will be watching the trade negotiations between China and the U.S. closely. "Apple didn't seem to change its Chinese marketing plans".

Steep prices of the 2018 iPhones and Apple's battery replacement programme, has together resulted in the not-so-good performance of the latest iPhones. Apple still provides total revenue by region, though, and its "Greater China" sales - including Taiwan and Hong Kong - were down 27% annually to $13 million, according to CNBC.

Smartphone labels from Apple to Samsung Electronics are contending with a plateauing global market after years of breakneck growth, as a lack of innovation discourages consumers from replacing devices as often as they used to.

Apple CEO Tim Cook said when Apple announced its revenue miss in January that almost all of the revenue miss can be attributed to China. Both companies have seen a slump in shipments in China, and have been the worst performing among top five smartphone makers.

IPhone shipments in China dropped almost 20% on an annual basis during the 4th quarter of 2018, according to a new estimate.

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