iPhone 7 Gave Apple Inroads to China Last Year

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The Apple Inc. (NASDAQ: AAPL) iPhone 8 came into the market too late to be a big seller in China. However, the two versions of the iPhone 7 helped Apple’s share in the country to impressive levels, particularly compared to local competition.

That trend means that the iPhone 8 and iPhone X could be real winners for Apple in the world’s largest market this year.

According to experts at Counterpoint Research:

The competition in China 2017, the biggest smartphone market around the globe in terms of sales volume, has become increasingly fierce with consumers’ upgrade demand lengthened and the overall market more saturated. Thus, we’ve witnessed a tough and struggling year for smartphone OEMs to attract the purchasing intention among Chinese consumers.

They also indicated that the market’s growth has slowed to the point where it is nearly flat. That means there will be a dogfight for sales, as is the case in the United States.

Local smartphone company OPPO has a product that led the market in 2017. Its RS5 had a 3.0% share. This was followed by the iPhone 7 Plus at 2.8%, the Vivo X9 at 2.7%, the OPPO A57 at 2.6%, the iPhone 7 at 2.4% and the OPPO R11 at 2.3%.

Apple management has said repeatedly that its Greater China region is absolutely critical to future sales. However, progress has been disappointing. Revenue from Greater China rose only 12% in the most recently reported quarter to $9.8 billion. That is against Apple’s total sales for the quarter of $52.6 billion.

Counterpoint’s comments about Apple show that its recent progress may cheer Apple’s management. Its report said:

  • Apple is the only foreign brand standing at the Top 10 board in China market, thanks to the success of iPhone 7 series.
  • iPhone 7 series demonstrated plain performance in 1H 2017, yet in 2H it caught up under the implementation of price-cut strategy.
  • After the price of iPhone 7 series decreased, competitiveness of the product was getting evident, especially iPhone 7 Plus with 128G ROM, price of which was lowered under $900 representing over 16% discount.
  • In comparison iPhone 7 Plus performed better than iPhone 7, demonstrating that currently in China market price may not be the only concern among consumers. Apple users may value more on better specs (E.g. larger screen and dual-camera) than extra budget.

If Apple’s new iPhones do as well or better, the iPhone 8 has a chance to be the market leader, and Apple will be well on its way to beating local companies that have had a lock on the market for years.