Schedule a Demo
Does My Company Subscribe?
Apple may be facing trouble in China thanks to the sliding performance of its flagship device, the iPhone. According to data from Counterpoint Technology Market Research, shipments of the iPhone fell by 15% year over year in Q1 2017. At the same time, China-based brands Oppo and Vivo (both of which are owned by BBK Electronics), along with Huawei have seen substantial increases in shipments of their smartphones in the country.
Huawei is now China’s market leader in terms of smartphone shipments, having sent out 20.8 million units in Q1 2017, giving it a market share of 19.7%. It is followed pretty closely by Oppo, and then Vivo. Like Apple, South Korea’s Samsung has also seen a significant decline in its smartphone shipments in China, which dropped from 8.7 million in Q1 2016 to just 3.5 million a year later.
Part of Apple’s falling fortunes for the quarter might lie in normal purchasing cycles tied to the timing of the release of new iPhones, which generally come in September. As a result, sales of the device tend to be stronger toward the end of the calendar year, and in advance of the Lunar New Year festival holiday.
But the research firm also noted that the gains made by Huawei, Oppo and Vivo have largely been made in mid-tier priced smartphones, especially those priced between $300 and $399. That may be another reason Apple, which initially sold its base iPhone 7 model for about $960 in China, is getting left behind in the market— especially since mid-tier models have been adding solid features to their phones that rival or even exceed those available on iPhones.
In addition, the iPhone’s value proposition among Western consumers lies in its tight integration of hardware and iOS software—the iOS system and third-party apps.
However, in a market like China, that appeal may not carry over cleanly. Instead, users there are more invested in the utility of the country’s killer app—WeChat, which counted 889.3 million monthly active users as of the end of 2016. The messaging platform-cum-mobile-operating-system is itself OS agnostic: It works the same regardless of whether a phone is running iOS, Android or anything else, for that matter, and it can be loaded with apps, just like an operating system.
It’s certainly possible that rumors of the iPhone 8’s tip-to-tail redesign will be enough to entice a large number of consumers in China to rejuvenate the device’s fortunes. But we’ll have to wait until the end of the year to find out.
eMarketer estimates that US adults will average 12 hours 7 minutes of media usage per day this year, up 3 minutes from 2016. Time spent with mobile will account for nearly all of the increase.
Not a PRO subscriber? Find out how to become one.
You've never experienced research like this.
Nearly all Fortune 500 companies rely on us.
Inquire about corporate subscriptions today.