Apple's brand image in China is wrecked, expected to lead to big iPhone sales decline

Apple's brand image in China is wrecked, expected to lead to big iPhone sales decline
As if Apple's troubles in the world's largest smartphone market weren't already bad enough, iPhones have been reportedly facing somewhat of an "informal boycott" from consumers in China for several months now as a consequence of a heated trade war with the US that's showing no signs of a de-escalation.

Said boycott might be ramping up as uncertainty continues to hover over Huawei's thriving global smartphone business. While it remains highly unlikely that the Chinese government will retaliate against Trump's divisive ban on US companies collaborating with Huawei by kicking Apple out of the country, analysts are predicting huge drops for iPhone sales in the region before long.

Chinese patriotism means Apple's local tale of woe will continue

iPhones may get a major vote of confidence from Huawei CEO and founder Ren Zhengfei, who was recently quoted as describing Apple as his "teacher", but most people in China don't exactly agree with those words of praise for a foreign tech giant. The nation's smartphone shipment charts were dominated by domestic manufacturers way before trade conflicts escalated, with Huawei in the lead back in Q3 2018, for instance, followed by Vivo, Oppo, and Xiaomi.

Apple was ranked fifth in China between July and September last year, actually climbing a spot in Q4 2018 sales before falling back to fifth place during the January - March 2019 timeframe. More importantly, regional iPhone shipments declined throughout this period compared to the results posted in the same three quarters of 2017 and 2018. The biggest drop came in the first three months of 2019, when Apple was only able to ship 6.5 million iPhones in China, according to Canalys, down a staggering 30 percent from the 9.3 million units sold at the beginning of the previous year.

Still, certain experts claim China accounts for an important 18 percent of "all Apple sales", a figure that could soon be cut in half as even more Chinese citizens will feel the urge to turn their backs on Apple and buy "domestic mobile brands." Unlike Huawei, which seems to be maintaining and even improving its brand image in China, Apple's brand is "being damaged" as we speak, according to Citi analysts, with a particularly bad deterioration of the company's reputation noticed "very recently."

How bad could things get for Apple in China and worldwide?

Obviously, Apple doesn't stand to lose as much money and as many sales as Huawei due to all these political tensions and complications. But half of 6.5 million iPhone shipment units in a single quarter is still a lot. Not to mention half of the 11.8 million units the Cupertino-based tech giant reportedly sold in China during the final three months of 2018. Of course, the 50 percent drop is just an educated guess from a reputable provider of financial services, following perhaps an even more daunting prediction recently made by Goldman Sachs.

Analysts at that particular investment firm think Apple could shed as much as 29 percent of its global profits as a result of its brand "deterioration" in China in a "worst case scenario" that's however unlikely to materialize. Probably the biggest problem is that iPhone popularity has been steadily declining in virtually all corners of the world, making Apple's mission to offset near-guaranteed regional losses one even Tom Cruise would find tricky to complete.

In Q1 2019, for instance, Apple's worldwide smartphone sales numbers dropped between 9 and 16 million units, according to different research firms, which naturally means China is far from the company's only problem right now. 



1. PhoneCritic

Posts: 1354; Member since: Oct 05, 2011

Well, its expected no brand stays on top forever in any market, Nokia, RIM, Microsoft, Oracle, Sears,K-Mart, IBM, Kodak and the list goes on and on. Apple inc had its time now its another brand turn. The cycle goes on " My son nothing new under the sun what's be done has been done before there is nothing new under the sun".

3. sgodsell

Posts: 7433; Member since: Mar 16, 2013

Apple declined all of last year in China, before any of this started.

15. oldskool50 unregistered

Apple was on the decline even when Tim Cook was trying to do a deal with China Mobile to begin with. so the decline started even before this. Apple created their decline in China by pricing the iPhone XR at $1000 outside the US. and now tariff's make them even more expensive. Apple could have just released the XR for $500 and made a killing all over the world. But instead they made all 3 models above the price-line most can't pay, or even want too. They are declining mostly do to pricing and they can't turn back now. Now all they can do is simply cheap out on hardware to keep their cost down, do they don't increase cost at retail. Which is why the next iPhone is gonna be chalked full of cheap hardware compromises.

21. mackan84

Posts: 548; Member since: Feb 13, 2014

Apple will stick with it’s strategy. Last years models will be $100 dollar off. I’m curious to if they’ll keep the XS-line. With minor upgrades to the new one it will be hard to justify the extra buck for the latest model.

31. Mike88

Posts: 435; Member since: Mar 05, 2019

Why do they even care about China,,apple will still be the best without zero sale in China

32. Kloak

Posts: 82; Member since: May 27, 2018

Maybe because China have 30% of the world population? And because apple its already the third "best" worldwide, and if things keep going like previous years they soon will be fourth or fifth.

6. mackan84

Posts: 548; Member since: Feb 13, 2014

Didn’t know Apple has ever been on the top of smartphones sales ever... Besides one quarter in 2014.

16. oldskool50 unregistered

They have never sold more phone then any OEM, whether they sold Android phones or not. Nokia was the top dog for years until Samsung past them and Samsung has been the top dog since. Apple has NEVER sold more phone than the biggest OEM. They were the top seller of a phone as a single model for like 2 years and then when Samsung announced the Galaxy S, the Galaxy brand has been the top selling single model branded device since. The most phone Apple has sold in a single year was 220M. Nokia and Samsung have been way above that many time. In fact until 2018, Samsung had been selling 300M+ phone for 11 years straight. Most of all Samsung phones are galaxy branded expect for a hand full. Samsung sold over 250M+ "Galaxy" branded devices for the past decade and counting.

20. mackan84

Posts: 548; Member since: Feb 13, 2014

Yes I’m aware. That’s why I wrote it with sarcasm. The only time iPhone sold more was one quarter in 2014. Apples biggest hunt has always been ASP which is more then double Samsung’s.

2. Diego!

Posts: 876; Member since: Jun 15, 2009

I'm glad Chinese people decided to support a national brand. We all know they are not the only ones spying on us... please

7. Feanor

Posts: 1379; Member since: Jun 20, 2012

The problem for me is the following; I know that Google and other western companies have too much data of my private life, but it has yet to be proven how they are using them against me (I think they don't). On the contrary, the Chinese regime is already actively using data it collects and puts it in very real use, like the infamous Social Credit System etc. So, I'm afraid that despite the general uproar against USA, there is still a huge qualitative difference as to how the two cultures use the result of their espionage on their citizens and abroad.

4. vgking9699

Posts: 194; Member since: Mar 01, 2019

Chinese patriotism, lol They enjoy being communist and being told how to live and how to think lol

5. htcisthebest

Posts: 437; Member since: Nov 15, 2011

Just like Americans are being brainwashed by their government into thinking that all major non-American companies are enemies to American companies, right?

13. baldilocks

Posts: 1538; Member since: Dec 14, 2008

They can be.

22. lyndon420

Posts: 6823; Member since: Jul 11, 2012

Exactly right. America needs the drug trade...that's why 911 happened, and why we all were told to believe that Bin Laden was behind it. I actually was believing that bs until I started doing research into it... especially with building 7.

12. alanrock

Posts: 323; Member since: Oct 04, 2018

every commercial you ever watched ...

8. splus

Posts: 160; Member since: Nov 26, 2011

50% drop in iPhone sales in China is very optimistic! It'll be much worse than that. What Chinese would want to buy an iPhone after what Trump did to Huawei?

18. blingblingthing

Posts: 974; Member since: Oct 23, 2012

They should stand by huawei. Trump is using Huawei as tool to leverage control over China. While I agree China does seem to take advantage of trademarks and copyrights, I think that's for on companies making goods to find someone else if they have an issue with this.

9. 47AlphaTango

Posts: 734; Member since: Sep 27, 2015

It won't be long. All american companies who have outsourced their manufacturing process in china will be removed by Xi. Will south korea or taiwan grab that opportunity?

10. 47AlphaTango

Posts: 734; Member since: Sep 27, 2015

Makes me wonder why huawei is the top smartphone companies in china? While vivo, oppo, xiaomi, zte, lenovo, and other chinese smartphone companies are at the negative line.

27. digitalnidizajn

Posts: 2; Member since: Apr 25, 2019

It's growth factor, not absolute numbers, shows just trend per brand

11. oldskool50 unregistered

Good. I hope China bans the iPhone and bans his manufacturing as well. Ban all exports of US companies form China period. This will hurt the US more than China in the long term. Once they ban all exports and even imports to China, every big US company will be on the phone to the White House saying get this over with. The Corps own the W.H. All they have to do is sneeze on Trump and he will do their bidding. We need to hurt US corps where it hurts most. MAKE THEM LOSE MONEY and a deal will be done with the quickness.

14. baldilocks

Posts: 1538; Member since: Dec 14, 2008

Everytime I read a moronic post like yours, I thank God I am an American. Stay wherever you are...-please!

33. oldskool50 unregistered

I'm an American. I also don't have to see it your way. If Trump wants to play hardball, then play hardball with them. What you don't understand is simple. China purchased $1.2B of US debt, to help the Chinese Yuan be more comparable with the US Dollar. THis allowed China to be more competive in export pricing allowing US companies to make products in China and ship them here for almost nothing. If the US wants to ban Huawei, then China should ban APple or anyone else they feel needed to make US suffer. Its time for the US to get a taste of its own medicine. If you have a problem with that, sucks for you. I am personally tied of the US trying to always bully others. This country spies on everyone yet worries about others spying on them? Typically hypocritical just like Apple and their fans. But I don't want China to ban Apple just because of the trade war. I want China to ban Apple because of all the frivolous lawsuits, because of all the tech and ideas they have stolen from others. I want them to die for lying and deceiving their customers and charging them outrageous prices for 2/3 year old tech. I want APple to die because they are a greedy evil corporation who has hurt people to get rich. This is exactly what I said of Microsoft of the 80's and 90's. But Microsoft has changed for the good of technology while Apple who started as good is now as evil as the Devil himself. Apple who sues other OEM's in rigged courts, accused a man they knew wasn't stealing out their stores, but yet had him arrested anyways, who has stolen ideas from devs, ban their apps from their store and then release the idea in their products, who has sold and released products they knew had defects and did so for several years and then lied in court or created programs whch illiminated others from fully benefiting from repairs and also charging more to repair a product they produce vs what it costs to make and many many many more things. Apple deserves to die a horrible death for the wrongs they have done. And if you have a problem with that...SUCKS FOR YOU!!!! And I don't even have to be American to be against what is wrong, and want what is right. China is gonna retaliate and I hope you enjoy not paying through the nose for US products for a war that our own country started.

19. D34ever

Posts: 229; Member since: Jul 14, 2018

Love them patriotic Chinese!!


Posts: 58; Member since: Oct 25, 2018

As expected sales of Apple products sold legally will decline many Chinese gonna buy in the black market or in USA shores cuz they can’t live without something that shows money or status, meanwhile most American Fandroids buying anything Huawei makes just because they hate Apple.........end of the story.....!!!!

30. Kloak

Posts: 82; Member since: May 27, 2018

In China its actually the opposite, Apple is used by the mid class, while the upper class use Huawei so that won't care at all in there.

24. domfonusr

Posts: 1087; Member since: Jan 17, 2014

In spite of this ban on Huawei using American IP, it seems that Huawei and China will continue to reverse-engineer the tech that they need, since the manufacturer has stockpiled a year's worth of silicon and components. Soon enough, they will have their own (partly stolen) ARM equivalent, Google Play Store equivalent, and Android equivalent... they probably won't be as good as the original articles for most people, but they'll be cheaper by far, and I can see some people in the western world looking longingly at those Chinese wares. If ever there was the means, the potential, and the "nudge" to get a third option for smartphone OS's, this situation with Huawei is about the perfect blend of things to get such an opportunity rolling. It will be tough, and there will almost certainly be reverse-engineering and IP-theft, but I can see it happening. They have already proven that they are good at it, and they have caught up enough that they are starting to venture into new territory in quite a number of aspects. If the last of their dependencies on foreign-IP can be reverse-engineered away, and they can keep experimenting like they have already been doing in some respects, then I would say that we may indeed see Huawei enter the race as the home of the proverbial "third horse" OS that actually gets traction in China, and which then has hope of becoming globalized beyond that as they develop it further - unlike Microsoft's Windows Phone/Mobile... watch out, Android and iOS!

25. foreverNOOB

Posts: 167; Member since: Jul 07, 2017

Tom Cruise = Tim Cook?? So, this is " Mission Super Impossible" 5555

26. Dadler22

Posts: 241; Member since: Dec 11, 2008

Hauwei could use the support, good for them. Maybe apple will step it up LOL

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