Do you recall the difficulties Apple had getting the iPhone into China? Eventually, the Apple iPhone 5 was offered in the country and China became the manufacturer's most important market. Last year, Apple had the squeeze put on it in China by consumers who suddenly became patriotic in light of what they perceived to be U.S. bullying of Huawei. Many of these Chinese smartphone owners decided to replace their iPhone with a shiny new Huawei model figuring that each iPhone unit replaced was a slap in the face of Uncle Sam, Tim Cook, and Donald Trump.
Reuters reports that Chinese government data reveals that less than 500,000 iPhone units were rung up in the country during February. The data was released by the China Academy of Information and Communications Technology (CAICT).The latest problem holding back iPhone sales in China doesn't have a brain so it has no motive. The coronavirus forced production of the iPhone to shut down for weeks and with all 42 Apple Stores closed for a period of time, demand waned. Assembly lines are ramping back up and 29 of the stores are now open for limited hours. But
From January to February iPhone sales in China declined 75%
Overall, 6.34 million smartphones were sold in the country by "major" brands last month, 57% lower than the 14 million connected handsets that were purchased during the same month a year ago. That was the lowest number of smartphones sold in China during the month of February since 2012, which was when CAICT first started keeping this data. During the month, the number of Android phones sold in the country plunged 54% from 12.74 million units to 5.85 million.
The exact number of iPhone units purchased in China last month was 494,000 compared to the 1.27 million sold in February 2019. That works out to a stunning 61.1% annual decline. And in January 2020, Apple sold more than 2 million iPhone handsets in China resulting in a sequential drop of more than 75%.
Weighing in on the numbers, Wedbush analyst Daniel Ives said, "While this is very nervous time...we caution that Chinese demand in the March quarter is not the trend, but a 'shock event' that we believe will be short lived."
Apple no longer reveals the number of iPhone units it sold during a quarter. Instead, it provides the amount of revenue it has generated from the product during the three-month period. For example, during Apple's fiscal first quarter of 2020, a period that included the 2019 holiday shopping season, the company took in $55.96 billion in revenue related to iPhone sales. That easily topped Wall Street forecasts for $52 billion. It should be interesting to see how the coronavirus pandemic has affected Apple in terms of dollars and cents. The company hasn't announced when it will release its fiscal second-quarter report but it should take place at the end of April or early in May.
Last week, Apple told its employees in Cupertino to work from their homes if they can and sent a care package to some quarantined employees in China. The package not only contained a few food items, but it also came with the latest 10.2-inch iPad tablet. Speaking of the iPad, unlike the iPhone, sales of the tablet have been soaring in China. That is because they are being used by employees who have been told to telecommute to work. Children are using the tablets to view their school lessons which are now being streamed. In addition, the iPads sent by Apple can help those stuck at home connect to the outside world while providing several distractions for both adults and children not allowed to leave their apartments.