Apple iPhone Falls to 5th Place in China

By Douglas A. McIntyre Updated Jan 13, 5:08AM EST · Published Jul 29, 8:40AM EDT

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Apple iPhone Falls to 5th Place in China — © Thinkstock

The Chinese smartphone market is growing. Apple Inc. (NASDAQ: AAPL) is not part of that growth. Apple desperately needs growth in what it calls Greater China to be the cornerstone of its revenue improvement worldwide. Management has made that clear.

According to major research firm Strategy Analytics:

China smartphone shipments grew 4 percent annually to hit 109 million units in Q2 2016. Huawei held on to first position and captured 18 percent smartphone marketshare in China, followed by fast-growing OPPO in second place.

Linda Sui, Director at Strategy Analytics, said:

China smartphone shipments increased 4 percent annually from 105.1 million units in Q2 2015 to 109.0 million in Q2 2016. China returned to growth for the first time in a year due to improved LTE volumes from local brands, robust operator promotions, and a stabilized economic situation. China remains by far the world’s largest smartphone market, accounting for nearly 1 in 3 of all 340.4 million smartphones shipped globally this quarter.

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Huawei phones shipped were 19.1 million in the second quarter, compared to 16.6 million in the same period last year. OPPO shipments rose to 15.2 million from 7.3 million. Vivo’s shipments rose to 13.0 million from 7.8 million. Xiaomi’s shipments fell from 19.5 million in the second quarter last year to 12.8 million. Apple’s shipments fell from 9.7 million to 7.3 million.

Woody Oh, director at Strategy Analytics, said:

Apple posted a soft quarter in China, maintaining fifth position with 7 percent smartphone marketshare in Q2 2016, down from 9 percent a year ago. Mixed demand for the iPhone 6s, overstocked volumes in channel from previous quarters, as well as stronger competition from Huawei, OPPO and others were among the key factors for its lackluster performance.

Apple’s third-quarter revenue performance in Greater China also showed the trend. Revenue dropped from $13.23 billion to $8.49 billion.

As is true with Apple’s performance during the remainder of year, the iPhone 7 cannot become soon enough.

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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.