Apple sales tumble in China as smartphone market shrinks

Huawei reports 23.3% gain in shipments last quarter even as Apple and Xiaomi face a sharp slump

A view of an Apple store in Grand Central Station in New York, Jan 29, 2019.

As expected, Apple's iPhone shipment numbers in China collapsed last quarter.

Apple CEO Tim Cook said when Apple announced its revenue miss in January that almost all of the revenue miss can be attributed to China. Profit was $19.9 billion or $4.18 a share.

Apple's October-December shipments suffered a almost 20-percent decline from the same period in the previous year.

Apple reported a 19.9% decline in shipments in China for the fourth quarter while Xiaomi fared even worse with a 34.9% decline during the same period.

The overall Chinese market contracted by 9.7 percent in the quarter, but Apple declined at about twice that pace, research firm IDC said yesterday in a report.

Apple's high iPhone prices hurt it in China, according to IDC, a market research firm. It's been more than 10 years since day one and iPhones remain one of the most popular phones on the market.

Apple said it will pursue iPhone price cuts in markets that has been affected by the stronger dollar. Earlier this year, Apple CEO Tim Cook said that there was a low demand for iPhones in Greater China. While Apple's share of the Middle Kingdom's smartphone dropped, sales of devices from rival Huawei Technologies Co.

Mawston said the iPhone has been struggling in China for the past three years after major carriers like China Telecom reduced their subsidy programs for 4G smartphones. This means that competitively priced, feature-packed phones have caused problems for the iPhone which has become more expensive over time.

Apple can reignite demand for the iPhone by cutting prices, introducing a much cheaper model, or persuading carriers like China Telecom to restart their subsidy programs, added Mawston. Sales on the Chinese mainland and in Hong Kong and Taiwan tumbled 27 percent on the year to USD13.2 billion, the firm said on January 30 in its financial report for the first quarter of its fiscal year 2019 - the final quarter of 2018.

Apple still relies on China to produce many of its products, so it will be watching the trade negotiations between China and the United States closely.

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