Ap­ple rev­enue drops as China sales tum­ble

China Daily (Canada) - - LIFE - By MASI masi@chi­nadaily.com.cn

Ap­ple Inc saw­its first quar­terly rev­enue drop in 13 years on weaker China per­for­mance while its lo­cal ri­valHuawei Tech­nolo­gies Co is gain­ing strong mo­men­tum in the mid- to high-end sec­tor.

Ap­ple said on Tues­day its sales dropped by more than a quar­ter in China, its sec­ond­largest mar­ket af­ter the United States.

The com­pany said in its fis­cal quar­ter that ended on March 26, sales in China fell 26 per­cent to $12.49 bil­lion, due to weak de­mand for iPhones in the coun­try. In the same quar­ter a year ear­lier, Ap­ple’s China sales rose 71 per­cent.

Tim Cook, CEO of Ap­ple, at­trib­uted the sharp de­cline to poor sales in Hong Kong, say­ing that Chi­nese main­land sales only went down by 7 per­cent in con­stant cur­rency. The dis­ap­point­ing per­for­mance helped pull down its quar­terly rev­enue to $50.6 bil­lion.

But an­a­lysts said gone are the days when Chi­nese con­sumers wait in long queues in front of Ap­ple stores for newly re­leased gad­gets as the coun­try’s home­grown brands such as Huawei and Xiaomi Corp are push­ing up-mar­ket.

Ac­cord­ing to the lat­est re­port by Coun­ter­point Tech­nol­ogy Mar­ket Research, in the first quar­ter of 2016, de­mand for iPhones in China dropped al­most 32 per­cent year-on-year, with a ship­ment of 12.5 mil­lion units.

Ap­ple’s lat­est roll­out iPhone SE, which was un­veiled in March, did not con­trib­ute to any uptick in the lat­est quar­ter, the re­port said.

James Yan, a Beijing-based an­a­lyst at Coun­ter­point, said gen­er­ally, smart­phone ven­dors of­ten see ship­ment de­cline in the first quar­ter, given that the Spring Fes­ti­val took place on the pe­riod when work­ers had va­ca­tions, stopped man­u­fac­tur­ing hand­sets and caused a short­age in global sup­ply.

“But this year Ap­ple per­formed pretty badly. Its iPhone 6S, with only in­cre­men­tal im­prove­ments to iPhone 6, failed to spark en­thu­si­as­tic and con­sis­tent pur­chas­ing seen be­fore,” Yan said.

In sharp con­trast, Huawei re­gained its lead­ing po­si­tion, with ship­ments of 16.5 mil­lion units to China in the lat­est quar­ter. The Shen­zhen­based com­pany is win­ning cus­tomers with smart­phones sporting high-end parts and priced hun­dreds of dol­lars cheaper than iPhones.

Ear­lier this month, Huawei un­veiled its lat­est flag­ship high-end smart­phone P9 be­fore The Wall Street Jour­nal re­ported that the world’s third-largest smart­phone maker is plan­ning to raise $2 bil­lion by sell­ing bonds to ex­pand its mo­bile busi­ness.

Liu Chang, a 26-year-old com­puter pro­gram­mer in Shen­zhen, said: “I hope Ap­ple can re­al­ly­comeup with a rad­i­cal in­no­va­tion on its fu­ture iPhones. Oth­er­wise, I will def­i­nitely opt forHuawei.”

Di Jin, research man­ager at IDC China, said cur­rently Huawei and Ap­ple are still tar­get­ing dif­fer­ent groups of users

“Huawei fo­cuses more on busi­ness­men while iPhone is more like a sym­bol of pop­u­lar cul­ture and fashion,” he said.

Unit: mil­lion 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 Source: Coun­ter­point Tech­nol­ogy Mar­ket Research LIU LU­NAN / CHINA DAILY XIN­HUA

A man tries Huawei's dual-cam­era smart­phone P9 at a re­tail out­let in Dubai on Mon­day. Huawei has col­lab­o­rated with Le­ica to of­fer the dual-lens model, which is equipped with the Hy­brid Fo­cus tech­nol­ogy that uses up to three mea­sure­ment method­olo­gies.

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