Apple might be 'pricing the iPhone out of China', with Q4 sales down 22 percent

Apple might be 'pricing the iPhone out of China', with Q4 sales down 22 percent
It’s no longer a big secret that the global smartphone industry is in trouble, with a general lack of innovation and extended upgrade cycles routinely cited by analysts as the main reasons for consecutive quarterly sales declines reported over the past year or so.

The situation is no different in China, although at least as far as one company is concerned, excessive retail prices are another key factor playing a crucial role in this troubling trend. In fact, when Apple made the unprecedented move of drastically lowering its revenue forecast for last year’s final calendar quarter, Chinese iPhone shipments were highlighted as one of the tech giant’s two greatest troubles.

In case you were wondering exactly how bad things got in the region for Apple between October and December 2018, Strategy Analytics has the answer... and it’s pretty bad. If the market research firm’s calculations are correct (and they’re usually fairly reliable), only 10.9 million iPhones were shipped to Chinese consumers this past quarter, down from 14 million units in Q4 2017.

That represents a massive 22 percent year-on-year drop, as well as the company’s worst quarterly performance in the country since early 2017. Yes, worse than several quarters during which Apple didn’t release anything new.

If it wasn’t already abundantly clear, the iPhone XS, XS Max, and even iPhone XR seemed grossly overpriced to an audience favoring devices from local brands Huawei, Oppo, and Vivo. While Apple is finally working to fix that, it’s unclear if the company’s figures will be able to rapidly bounce back as the US-China trade war continues.

Of course, smartphone shipments on the whole were down in China both in Q4 and during the entire year, but somehow, Huawei and Vivo managed to defy that trend. Huawei even pulled off a record 28 percent market share in Q4 2018 on the back of an impressive 23 percent year-on-year growth.

The market leader’s yearly numbers also surged a healthy 15 percent, to a grand total of 105.1 million unit shipments, while Apple’s full-year sales didn’t sink as badly as its Q4 figures, reaching 34.2 million units, down from 36.7 million in 2017. Obviously, the trend is the biggest problem, as well as those sky-high iPhone prices, which Strategy Analytics researchers are deeming harder and harder to sustain. 

Apple is already in big trouble in India, and if the company insists on maintaining its notoriously hefty profit margins, iPhones could ultimately be “priced out of China.”


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