Chinese iPhone Sales Plummet 20% As Huawei Cements Market Dominance

After offering ample, market-rattling warnings that its Q1 (a quarter that encompasses the holiday sales season) sales wouldn't live up to the expectations set in prior years, Apple confirmed in its earnings report that its holiday-quarter revenue declined for the first time since 2001, thanks largely to an unprecedented slowdown in China (long identified as a key growth market for the American consumer-tech giant), as the weaker yuan and a widespread aversion to American companies amid a burgeoning trade spat weighed on sales.

China

As China struggled with its most severe economic slowdown since 2009, Apple's sales revenue from Greater China slumped 27% in the most recent quarter.

Apple

However, since Apple stopped breaking out sales figures for its iPhone, iPad and Mac beginning in Q1, investors were left to assume that the bulk of the decline was due to slowing iPhone sales, an assumption supported by reports of suppliers slashing production to reflect lower shipment volumes, as well as Apple's own warnings.

But on Monday, research firm IDC issued a comprehensive report on Q4 smartphone sales in China, where offered a clearer picture on the magnitude of the slowdown. And according to a summary published by Bloomberg, the research firmed estimated that iPhone sales in China plunged 20% during the final quarter of 2018, the worst slump on record, suggesting that the slowdown was even more dire than many had believed. But Apple wasn't alone in reporting slowing sales: As the Chinese smartphone market plateaued, total domestic smartphone sales dropped by nearly 10%, and sales of phones produced by domestic smartphone maker Xiaomi recorded a drop that was nearly twice the size of Apple's, at 35%.


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


This would explain Apple's decision to slash iPhone prices by as much as 20% in certain foreign markets, including China.


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