NEW YORK: Apple’s Chinese smartphone shipments plummeted an estimated 20 per cent in 2018’s final quarter, underscoring the scale of the iPhone maker’s retreat in the world’s largest mobile device arena against local rivals like Huawei Technologies.
The domestic market contracted 9.7 percent in the quarter, but Apple declined at about twice that pace, research firm IDC said in a report on Monday. A slowing economy, lengthening replacement times and the iPhone’s hefty price tag contributed to the US giant’s decline, it said. Xiaomi fared even worse in the final months of last year, when shipments plunged almost 35 per cent, the consultancy estimates, report agencies.Smartphone labels from Apple to Samsung Electronics are contending with a plateauing global market after years of breakneck growth, as a lack of innovation discourages consumers from replacing devices as often as they used to. Apple also has to cope with the rise of Huawei, which is eroding its share of a market once pivotal to driving its growth. The country’s top electronics retailers slashed prices on the latest iPhones by as much as 20 per cent in past months - an unusual move that illustrated waning enthusiasm for Apple’s gadgets.
“Apple doesn’t have a good go-to market strategy that fits the rapidly changing Chinese market,” said Nicole Peng, a senior director at Canalys. “It also seemed to be slow in reacting to China’s economic slowdown and changes in consumption structure.”
Dissipating Chinese demand compounds the problems at Apple, which is struggling to deliver on another hit device as its marquee gadget loses some of its cachet. Revenue from the iPhone slid 15 per cent in the October to December period. To compensate for the loss, Apple is trying to replace phone sales with revenue from services. Chief executive Tim Cook has seen China as a key part of Apple’s strategy: last fiscal year the company generated almost $52 billion in revenue from Greater China, a region that includes Hong Kong. But with the country announcing its slowest economic growth since 2009, Apple said its sales fell 27 per cent in the holiday quarter.