Consumer Electronics

Another Blow to Apple as China's Smartphone Market Shrinks

Douglas A. McIntyre

Published: April 29, 2016 7:00 am

Last Updated: January 13, 2020 10:07 am

China was supposed to be the market in which smartphone companies would find huge growth that would offset slowing of growth the U.S. and European markets. It has not turned out that way, as smartphone shipments in China dropped in the first quarter by 5%, compared to the same period of the year before. In Apple Inc.’s (NASDAQ: AAPL) most recent quarter, the Greater China region disappointed. The trends in the area will make it more difficult for Apple to recover.

According to research firm Strategic Analytics:

Huawei maintained first position and captured 16 percent smartphone marketshare in China, followed by fast-growing OPPO in second place.

Linda Sui, Director at Strategy Analytics, said, “China smartphone shipments declined 5 percent annually from 109.8 million units in Q1 2015 to 104.9 million in Q1 2016. China smartphone growth is slowing due to market saturation, inventory build and economic headwinds. Despite the slowdown, China remains by far the world’s largest smartphone market, accounting for nearly 1 in 3 of all 334.6 million smartphones shipped globally this quarter.”

And:

Linda Sui, Director at Strategy Analytics, added, “Apple posted a soft quarter in China, slipping to fifth position with 11 percent smartphone marketshare. Mixed demand for the iPhone 6s and stronger competition from OPPO and others were among the key factors for its lackluster performance.”

Apple not only competes in a shrinking market, but also one in which the iPhone has declining popularity.

In the first quarter, Huawai had a market share of 16.6%, OPPO of 13.2%, Xiaomi of 12.8%, Vivo of 12.5% and Apple of 11.5%. Native manufacturers are burying Apple in China.

Apple investors looking to China to offset sales in the developed countries won’t get their wishes.