February 2, 2023

Apple loses top spot in China as smartphone sales slump

3 min read

Two research reports published this week showed apple (AAPL) The Chinese Android handset slipped to third place behind the brands.

Counterpoint Research said smartphone sales in China fell 14 percent in the first quarter, as volumes “fell close to the level seen during Q1 2020, affected by severe epidemics”. Report on Thursday.

apple (AAPL)Counterpoint Research added that sales in the three months to March fell by 23% compared to the previous quarter. The company enjoyed rapid growth in China last year, Immediately after the release of the iPhone 13.

Its market share in China is now 17.9%, up from 21.7% in the quarter ended December.

A report by Canalys on Friday also showed that Apple has slipped to third place in China, overtaking the market leader, with its first-quarter shipments down 36 percent from the previous quarter. Canalys tracks deliveries from manufacturers to retail stores rather than selling to consumers.

The first quarter of China's economy was good.  Lockdown leaves him in 'trouble'.

Ivan Lam, a senior analyst at Counterpoint Research, blamed Apple’s decline. The economic slowdown in China has “put money in people’s pockets.”

Lam added that Chinese parent brands – including Vivo, Honor and Oppo – outperformed Apple as their sales increased after being affected by the strong performance of the iPhone 13 in the last quarter of 2021.

Overall, seasonal decline in demand and severe economic uncertainty in the first few months of this year have dragged the market.

“I don’t think Q2 data will improve much, as the ongoing lockdown will continue to affect consumer spending,” Lam told CNN Business.

I currently have a complete or partial lockdown. At least 27 cities It is affecting 165 million people across China, according to CNN estimates. Shanghai – The country’s leading financial center and a major manufacturing center – has been in lockdown for over a month. Sanctions have forced many businesses to close and have hit economic activity hard.

China’s economy has slowed sharply in recent months. For the first time in more than a year, a retail agreement was reached in March. Unemployment rose to a record 6 percent in 31 major cities.

Meng Meng Zhang, a research analyst at Counterpoint Research, said in a report with Data Release: Significantly affect. “

He expects China’s smartphone demand to remain “weak due to weak consumer sentiment and lack of new inventions to motivate consumers”.

Apple warns of serious supply headwind in China
It’s not just weak demand that is hurting Apple in China. Company Also face Supply chain challenges Due to China’s lockdown. Foxconn, a major supplier to Apple, Production stopped For a few days last month at his Shenzhen factory when the city imposed a quad lockdown. Pegatron, an iPhone assembler, too Suspended operations At its Shanghai and Convention plants earlier this month.

In a earnings call on Thursday, CEO Tim Cook said that the growing Qwide sanctions in China, along with the shortage of silicone in the industry, would affect the company from 4 4 billion to 8 8 billion next quarter.

“Supply chain issues remain a major factor in China and will affect June growth,” said Dan Aves, an analyst at Wedbush Securities.

Earlier this month, Canelles warned that smartphone sellers around the world are facing great uncertainty due to China’s rolling lockdown, Russia-Ukraine war, and the threat of inflation.

– Samantha Murphy Kelly contributed to this report.

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