China has always proven to be a difficult market for smartphone makers as companies often struggle to attract consumers even with the highest end smartphones due to cheaper alternatives offered by Chinese smartphone manufacturers. For example, although Samsung launched its flagship Galaxy S8 and S8 Plus devices with 4GB RAM in other markets, the company was forced to ship smartphones with even higher configurations to make it appealing to Chinese consumers. On the other hand, Apple for a long period of time enjoyed stable sales figure in the Chinese market due to superior marketing techniques. However, it seems that the time has finally come for Apple to reconsider its approach in the country.
In a report earlier, Business Insider reported that the company suffered incredible 20 percent decline in the market. It said, “Apple’s recent weakness in China has largely been due to iPhone. During the Q2 17 earnings call, Apple spoke of 20% revenue growth for Mac and “double-digit growth” for Services in Greater China, which suggests that iPhone + iPad revenue must have declined at least double digits at constant currency. Third party market research (IDC) corroborates that Apple’s >$500 ASP smartphone units declined >20% in each of the past 5 quarters in Mainland China.”
On the other hand, Oppenheimer also commented in the similar way as it said, “We recently conducted a series of company meetings in China and Taiwan that focused on the smartphone supply chain. There was general consensus among our conversations that confirms our thesis that Apple’s dwindling market share in Greater China is due to the lack of compelling differentiation among hardware and software. The mobile user experience in China is heavily dictated by Tencent and other local Internet companies, making Apple’s software and services ineffective as key differentiators. That said, we do believe there is pent-up demand for iPhone 8, which is widely reported to make a few major design changes. We expect a temporary rebound in share.”
It remains to be seen if the company goes onto recover in future and establish itself in the market. As iPhone 8 launch few months away, it should help the company to recover its declining sales figures.