There is no other way to say: things do not look good on
(ticker: AAPL) in China.
Weak iPhone shipments have undermined Apple's stock in recent months, and the problem in the Chinese market has been highlighted by the company itself. And now we have additional data to show how rough it has been.
Sales of Apple's flagship product doubled 20% in the fourth quarter quarter, dropping twice as much as the slim Chinese smartphone market sales total, according to an IDC market research report.
The steep decline contributed to Apple's disappointing earnings report last year and a 15% decline in global iPhone sales in the December quarter. It has also spurred some doubts about the long-term strength of the iPhone.
Apple's decline in the world's largest mobile market was attributable to a braking economy, iPhone's fierce price tag, and longer consumer replacement cycles. The Chinese supplier Huawei Technologies gained market share at the expense of Apple, despite the arrest of the finance director for alleged bank fraud.
The latest iPhones start at $ 749 for the iPhone XR and are priced as high as $ 1,449 for the iPhone XS with maximum storage.
At the beginning of January, Apple CEO Tim Cook warned that the deceleration in China would suppress sales, causing the company's first revenue outlook to be cut in nearly two decades. The company has focused on pushing to increase its service business – the company's fastest growing revenue segment – as iPhone sales have failed. Apple did not immediately respond to a request for comment on Monday.
Apple reported a 27% decline in total sales to $ 13 billion in China during the December quarter.
Huawei, who shortly passed Apple to become the world's No. 2 smartphone brand last year, led all major brands in China. The unit shipments increased 23% in the December quarter, according to IDC. China's Oppo and Vivo made modest gains to rank second and third respectively, followed by Apple.
Xiaomi (Hong Kong: 1810), who finished fifth, had an even worse quarter than Apple. Its shipments went down almost 35% due to inventory corrections and an internal restructuring, IDC says.
"The domestic smartphone market environment in 2019 does not look very optimistic," said senior analyst Wang Xi in the report. And "5G phones will still only make up a very small part of the overall market. We have a long way to go before they become commonplace," said IDC.
If Apple and
(South Korea: 005930) hopes to reverse the flag market demand for smartphones, they need to become more competitive or upgrade innovation to attract consumers.
Foldable displays, 5G-ready phones and 3-D cameras can revitalize the market, but superfast phones will not be widely available until 2020, according to IDC and other market researchers.
Write to Jon Swartz at email@example.com