The Data Is in: Apple's Sales in China Were Horrendous

Date : 02/12/2019 @ 10:39AM
Source : Dow Jones News

The Data Is in: Apple's Sales in China Were Horrendous

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By Dan Strumpf 

HONG KONG--iPhone sales in China slumped far more than overall smartphone sales there last quarter, costing Apple Inc. further ground against local rival Huawei Technologies Co. in the world's biggest smartphone market.

Apple's smartphone shipments to China in the last three months of 2018 were down 20% from a year earlier, according to International Data Corp., putting a finer point on Apple's shrinking sales in China late last year. Last month, Apple CEO Tim Cook blamed declining iPhone sales in China on the economic slowdown there.

That slowdown--and a global trend among phone owners of upgrading less frequently--contributed to a 9.7% drop in overall smartphone shipments in China in the quarter. But Huawei's shipments were up 23%, giving it 29% of the market and cementing its position as the country's top phone vendor, according to IDC, which reported Huawei also gained at the high end of the market long dominated by the likes of Apple.

"The high price point of the iPhone X in 2017 has lengthened the replacement cycle of users, while the new models of 2018 don't have enough innovations to make users buy," said Xi Wang, an IDC analyst in China. Huawei, by contrast, has taken technological strides that have made its devices more competitive in photography, gaming and business applications, he said.

Though its phones are virtually nonexistent in the U.S., Huawei's global smartphone sales were up a heady 44% in the fourth quarter, according to IDC, which ranks it the No. 3 vendor world-wide last year.

Fourth-quarter sales in China were also up for other local brands, including BBK Electronics Corp.'s Oppo and Vivo. Chinese companies are succeeding by offering lower prices and technology geared toward local buyers, analysts say.

But shipments by China's Xiaomi Corp.--which raised $4.7 billion in a Hong Kong initial public offering last year--were down 35% in the fourth quarter, according to IDC, which pointed to too few new products and disappointing sales of its flagship Mi Mix 3 smartphone.

The smartphone success is a rare piece of good news for Huawei. In December, Canadian authorities arrested its CFO on charges relating to evasion of U.S. sanctions on Iran. It is also fighting separate U.S. criminal charges that it stole intellectual property from T-Mobile US Inc. Huawei has denied all charges against it.

Meanwhile, the U.S. is lobbying allies to bar their telecom operators from buying 5G networking equipment from Huawei, which is the world's largest maker of items such as base stations, routers and switches.

Huawei has pressed ahead with a series of high-end phone launches that have helped it gain ground on Apple. The unveiling of a foldable 5G-ready phone is widely expected at a mobile industry event in Barcelona late this month.

Write to Dan Strumpf at daniel.strumpf@wsj.com

 

(END) Dow Jones Newswires

February 12, 2019 05:24 ET (10:24 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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