Another Blow to Apple as China’s Smartphone Market Shrinks

By Douglas A. McIntyre Updated Jan 13, 10:07AM EST · Published Apr 29, 7:00AM EDT

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Another Blow to Apple as China’s Smartphone Market Shrinks — © courtesy of Apple Inc.

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.”

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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.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.