Huawei Blamed As Things Go From Bad To Worse For Apple

China's top electronics retailers slashed prices on the latest iPhones by as much as 20 per cent in past months- an unusual move that illustrated waning enthusiasm for Apple's gadgets

China's top electronics retailers slashed prices on the latest iPhones by as much as 20 per cent in past months- an unusual move that illustrated waning enthusiasm for Apple's gadgets

Apple reported a 19.9 per cent decline in shipments in China in the fourth quarter, but climbed one place to No 4 in smartphone shipments after Xiaomi did even worse, tumbling 34.9 per cent during the same period, according to a report by research firm IDC, published on Monday.

Apple investors have been anxious about sales in China since the company last month lowered guidance for the quarter due to economic pressures in the region and weak iPhone sales.

During the period, the US tech titan reported revenue of $84.3 billion, which represented a 5% total decline - and a 15% decline in iPhone revenue - year-over-year.

IDC believes that while the Chinese smartphone market is shrinking, Apple is not aware of the problems caused by pushing up the iPhone price. A slowing economy, lengthening replacement times and the iPhone's hefty price tag contributed to the USA giant's decline, it said.

Bucking the trend, Huawei Technologies registered a 23.3 per cent gain, while second- and third-place Oppo and Vivo eked out modest gains of 1.5 per cent and 3.1 per cent, respectively.

Chief executive Tim Cook has seen China as a key part of Apple's strategy: last fiscal year the company generated nearly $52 billion in revenue from Greater China, a region that includes Hong Kong. The company has focused on its push to ramp up its services business-the company's fastest-growing revenue segment-as iPhone sales have faltered.

In recent times, many Chinese smartphone makers are adopting a two-brand strategy to cater to different customer segments. Apple also didn't seem to work on its Chinese marketing plans -- an area that needs constant updating.

Apple wasn't alone is losing market share in China, however.

For Xiaomi, the fall in shipments have been attributed to factors such as an adjustment in the company's product lines and inventory channels as well as a revamp of its internal organization.

"The domestic smartphone market environment in 2019 doesn't look very optimistic", IDC senior analyst Wang Xi said in the report. And "5G phones will still only comprise a very small portion of the overall market. We have a long way to go before they become mainstream".

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