Consumer Electronics

Apple iPhone Falls to 5th Place in China

Douglas A. McIntyre

Published: July 29, 2016 8:40 am

Last Updated: January 13, 2020 5:08 am

The Chinese smartphone market is growing. Apple Inc. (NASDAQ: AAPL) is not part of that growth. Apple desperately needs growth in what it calls Greater China to be the cornerstone of its revenue improvement worldwide. Management has made that clear.

According to major research firm Strategy Analytics:

China smartphone shipments grew 4 percent annually to hit 109 million units in Q2 2016. Huawei held on to first position and captured 18 percent smartphone marketshare in China, followed by fast-growing OPPO in second place.

Linda Sui, Director at Strategy Analytics, said:

China smartphone shipments increased 4 percent annually from 105.1 million units in Q2 2015 to 109.0 million in Q2 2016. China returned to growth for the first time in a year due to improved LTE volumes from local brands, robust operator promotions, and a stabilized economic situation. China remains by far the world’s largest smartphone market, accounting for nearly 1 in 3 of all 340.4 million smartphones shipped globally this quarter.

Huawei phones shipped were 19.1 million in the second quarter, compared to 16.6 million in the same period last year. OPPO shipments rose to 15.2 million from 7.3 million. Vivo’s shipments rose to 13.0 million from 7.8 million. Xiaomi’s shipments fell from 19.5 million in the second quarter last year to 12.8 million. Apple’s shipments fell from 9.7 million to 7.3 million.

Woody Oh, director at Strategy Analytics, said:

 Apple posted a soft quarter in China, maintaining fifth position with 7 percent smartphone marketshare in Q2 2016, down from 9 percent a year ago. Mixed demand for the iPhone 6s, overstocked volumes in channel from previous quarters, as well as stronger competition from Huawei, OPPO and others were among the key factors for its lackluster performance.

Apple’s third-quarter revenue performance in Greater China also showed the trend. Revenue dropped from $13.23 billion to $8.49 billion.

As is true with Apple’s performance during the remainder of year, the iPhone 7 cannot become soon enough.