iPhone Shipments Dive in China as Huawei Tightens Grip

Apple’s Chinese smartphone shipments plummeted an estimated 20 percent in 2018’s final quarter, according to Bloomberg. This is underscoring the scale of the iPhone maker’s retreat in the world’s largest mobile device arena against local rivals.

Chinese market contracted 9.7 percent in the quarter, but Apple declined at about twice that pace, research firm IDC said in a report. A slowing economy, lengthening replacement times and the iPhone’s hefty price tag contributed to the decline, it said. Xiaomi fared even worse in the final months of last year, when shipments plunged almost 35 percent, the consultancy estimates.

Smartphone labels from Apple to Samsung 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 also has to cope with the rise of Huawei, which is eroding its share of a market once pivotal to driving its growth. The country’s top electronics retailers slashed prices on the latest iPhones by as much as 20 percent in past months, an unusual move that illustrated waning enthusiasm for Apple’s gadgets.

Dissipating Chinese demand compounds the problems at Apple, which is struggling to deliver on another hit device as its marquee gadget loses some of its cachet. Revenue from the iPhone slid 15 percent in the October to December period. To compensate for the loss, Apple is trying to replace phone sales with revenue from services.

CEO Tim Cook has seen China as a key part of Apple’s strategy. Last fiscal year the company generated almost $52 billion in revenue from Greater China. But with the country announcing its slowest economic growth since 2009, Apple said its sales fell 27 percent in the holiday quarter. The Chinese slowdown was the driving factor behind Apple’s first revenue outlook cut in almost two decades. Cook however emphasized the long haul, highlighting 19 percent growth in services revenue.

Huawei, which briefly surpassed Apple to become the world’s No. 2 smartphone brand in 2018, remains the runaway leader at home. It shored up its lead after unit shipments soared 23.3 percent in the December quarter, leading all major brands, according to IDC. Apple was ranked fourth by shipments in the country during the period, trailing China’s Oppo and Vivo, IDC said.