Apple Hurt in China as Overall Market Falls

By Douglas A. McIntyre Updated Jan 12, 12:28AM EST · Published Apr 26, 6:25AM EDT

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Apple Hurt in China as Overall Market Falls — © Thinkstock

Apple Inc. (NASDAQ: AAPL) CEO Tim Cook repeatedly has said China is critical to the company’s success. It is the largest smartphone market in the world. New research shows Apple is in deep trouble in the number one nation in the world by population. It is unlikely it can make up for the trouble elsewhere.

Research firm Canalys reported that overall China market sales dropped a sickening 21% in the first quarter compared to the same one last year. Apple’s unit sales did not put it among the top four vendors, all of which are locally based.

In a new piece of research, Canalys experts wrote:

Smartphone shipments in China suffered their biggest ever decline in Q1 2018, down by more than 21% annually to 91 million units, a number first passed some four years ago in Q4 2013.

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In comments about the market leader and the other top vendors, its experts added:

Huawei (including Honor) managed to grow shipments by a modest 2%, maintaining its lead and consolidating its market share to about 24% by shipping over 21 million smartphones. Second-placed Oppo and third-placed Vivo bore the brunt of the overall decline, with shipments falling by about 10% to 18 million and 15 million respectively. Xiaomi was the only company to buck the trend, growing shipments by 37% to 12 million units, and overtaking Apple to take fourth place.

These top four companies held 73% of the market, based on shipments during the period.

In Apple’s most recently reported quarter, which ended December 30, overall revenue rose 13% to $88.3 billion. Greater China revenue rose 11% to $18 billion. Even Apple’s revenue in Europe is larger and growing more quickly. In the quarter, it hit $21.1 billion, up 14%.

The China data from Canalys confirms recent investor concerns. Financial results from some of its vendors have been poor. Some experts who follow and predict Apple sales claim the new iPhone X, the most expensive model, has produced poor results for Apple. Apple’s share price has fallen 5% this year to $164, underperforming the market. This is quite a contrast to the 70% improvement over the past two years.

The skepticism about Apple’s near-term future has grown rapidly over the past several weeks. The research about China’s market only confirms it.

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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.