iPhone 7 Gave Apple Inroads to China Last Year

By Douglas A. McIntyre Updated Jan 12, 4:29AM EST · Published Jan 15, 6:50AM EST

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iPhone 7 Gave Apple Inroads to China Last Year — © Thinkstock

The Apple Inc. (NASDAQ: AAPL) iPhone 8 came into the market too late to be a big seller in China. However, the two versions of the iPhone 7 helped Apple’s share in the country to impressive levels, particularly compared to local competition.

That trend means that the iPhone 8 and iPhone X could be real winners for Apple in the world’s largest market this year.

According to experts at Counterpoint Research:

The competition in China 2017, the biggest smartphone market around the globe in terms of sales volume, has become increasingly fierce with consumers’ upgrade demand lengthened and the overall market more saturated. Thus, we’ve witnessed a tough and struggling year for smartphone OEMs to attract the purchasing intention among Chinese consumers.

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They also indicated that the market’s growth has slowed to the point where it is nearly flat. That means there will be a dogfight for sales, as is the case in the United States.

Local smartphone company OPPO has a product that led the market in 2017. Its RS5 had a 3.0% share. This was followed by the iPhone 7 Plus at 2.8%, the Vivo X9 at 2.7%, the OPPO A57 at 2.6%, the iPhone 7 at 2.4% and the OPPO R11 at 2.3%.

Apple management has said repeatedly that its Greater China region is absolutely critical to future sales. However, progress has been disappointing. Revenue from Greater China rose only 12% in the most recently reported quarter to $9.8 billion. That is against Apple’s total sales for the quarter of $52.6 billion.

Counterpoint’s comments about Apple show that its recent progress may cheer Apple’s management. Its report said:

Apple is the only foreign brand standing at the Top 10 board in China market, thanks to the success of iPhone 7 series.

iPhone 7 series demonstrated plain performance in 1H 2017, yet in 2H it caught up under the implementation of price-cut strategy.

After the price of iPhone 7 series decreased, competitiveness of the product was getting evident, especially iPhone 7 Plus with 128G ROM, price of which was lowered under $900 representing over 16% discount.

In comparison iPhone 7 Plus performed better than iPhone 7, demonstrating that currently in China market price may not be the only concern among consumers. Apple users may value more on better specs (E.g. larger screen and dual-camera) than extra budget.

If Apple’s new iPhones do as well or better, the iPhone 8 has a chance to be the market leader, and Apple will be well on its way to beating local companies that have had a lock on the market for years.

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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.