Smartphone shipments to China plunge 11%

Huawei remained market leader in 2018, while Apple and Xiaomi lost ground

Shipments of the Apple iPhone to China fell 22 per cent in the fourth quarter of 2018. EPA
Shipments of the Apple iPhone to China fell 22 per cent in the fourth quarter of 2018. EPA

Smartphone shipments to China, the world’s largest smartphone market, dropped by more than 11 per cent to 408.5 million units in 2018, according to a new report.

Except Shenzhen-based smartphone manufacturer Huawei, most brands, including Apple, Oppo and Xiaomi lost ground in China last year, according to Boston-based research firm Strategy Analytics.

“The Chinese smartphone market is in recession and has declined for five consecutive quarters,” said Yiwen Wu, senior analyst at Strategy Analytics, adding that "the market is suffering from longer replacement cycles and weak consumer spending in China".

Huawei, which is facing mounting pressure over accusations from the US, Australia and Great Britain, among others, that its equipment is not secure and facilitates espionage, saw its domestic shipments increase by nearly 15.7 per cent year-on-year as its market share increased to 25.7 per cent in China in 2018.

A strong product portfolio, well-known brand name and an extensive retail network were among the main factors for Huawei's success, according to the report.

Cupertino-based Apple, which was surpassed by Huawei last year in terms of global market share, trailed in the No 5 position in China with only 8.4 per cent market share in 2018.

Apple has been under pressure in China for the past three years as its iPhone has fallen in demand, down year-on-year in the country for eight of the past 12 quarters, said Linda Sui, director at Strategy Analytics.

“Apple is heavily criticised for its expensive retail prices … it is in danger of pricing the iPhone out of China,” Ms Sui said.

In the first week of January, Apple revised its revenue outlook downwards for the first time in nearly two decades, citing economic slowdown in China as one of the main factors.

Industry analysts say Apple needs to look for new growth markets in the wake of its lukewarm run in China.

“We are looking at a very saturated industry with hardly any growth in global smartphone market in 2019,” Annette Zimmerman, vice president – analyst at researcher Gartner, told The National.

“China has always been an important market for Apple but now it has also become the most difficult. Therefore, for growth, Apple has to look for some other markets such as India, where it is already trying to gain more traction through special offers.”

Published: January 27, 2019 04:01 PM


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