Ap­ple China sales fall 30%

Firm faces grow­ing chal­lenge from lo­cal ri­vals of­fer­ing new tech and de­signs

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

Ap­ple Inc’s third con­sec­u­tive de­cline in quar­terly rev­enue and profit high­lights the chal­lenges the US tech gi­ant faces in China, as lo­cal smart­phone ven­dors work hard to ex­per­i­ment with new tech­nolo­gies and de­signs, an­a­lysts said onWed­nes­day.

Ap­ple said on Tues­day it saw a nearly 30 per­cent de­cline in it­sChina rev­enue in the quar­ter end­ing Septem­ber, the high­est fall among all re­gions, due to tepid de­mand for its iconic iPhones.

The firm recorded $8.79 bil­lion in rev­enue in China. Last year, the fig­ure was $12.51 bil­lion.

Ap­ple CEO Tim Cook said con­sumers were ex­cited about the firm’s lat­est model iPhone 7 se­ries, which would have a good per­for­mance in the next quar­ter.

“We are very bullish onChina,” Cook said in a fol­low-up earn­ings call.

The re­sult also marked Ap­ple’s first an­nual sales de­cline since 2001. Its an­nual rev­enue fell to $216 bil­lion in the 2016 fis­cal year end­ing Septem­ber, from a record $234 bil­lion in 2015.

Roger Sheng, re­search di­rec­tor at Gart­ner Inc, said Ap­ple’s de­cline in China is highly likely to con­tinue, be­cause so far the iPhone 7 has not gen­er­ated a very good sales mo­men­tum.

“Many con­sumers al­ready have­qual­i­ty­hand­sets­from­lo­cal play­ers and they don’t have im­me­di­ate need to up­grade theird­e­vices,” Sheng­said.

Ap­ple re­leases a flag­ship model once a year while lo­cal ri­vals such as Huawei Tech­nolo­gies Co Ltd launch a new prod­uct ev­ery one to two months, which puts them in a bet­ter po­si­tion to ex­per­i­ment with new tech­nolo­gies, he added.

Xiaomi Corp, for in­stance, un­veiled its Mi Mix pre­mium model on Tues­day, whose dis­play cov­ers al­most the en­tire front, de­vel­oped in part­ner­ship with fa­mous de­signer Philippe Starck.

Huawei turned to cam­era maker Le­ica to im­prove the photo-tak­ing ca­pa­bil­i­ties of its hand­set P9, which has proved very pop­u­lar among con­sumers.

“They have out­per­formed Ap­ple in­some­hard­ware com­po­nents,” said James Yan, re­search di­rec­tor at Coun­ter­point Tech­nol­ogy.

Ap­ple’s slide came shortly after Sam­sung scrapped its Galaxy Note 7 hand­set due to bat­tery ex­plo­sions, of­fer­ing good op­por­tu­ni­ties for ri­vals to ex­pand their share in the high-end mar­ket.

Nicole Peng, re­search di­rec­tor at Shang­hai-based con­sul­tancy Canalys, said: “Ap­ple will see a promis­ing fourth quar­ter with the ab­sence of its di­rect com­peti­tor Sam­sung in the high-end seg­ment, as long as it en­sures the sup­ply of iPhone 7 plus.”

Many con­sumers al­ready have qual­ity hand­sets from lo­cal play­ers and they don’t have im­me­di­ate need to up­grade their de­vices.”

REUTERS

Cus­tomers take a selfie as they en­ter the first Ap­ple store in Mex­ico City on Sept 24, 2016.

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