Com­pe­ti­tion takes a bite out of Ap­ple’s sec­ond-quar­ter rev­enue

China Daily (Canada) - - VIEWS - By FANFEIFEI fanfeifei@chi­

Ap­ple Inc re­ported a drop in rev­enue in China for its fis­cal sec­ond quar­ter ended April 1, the fifth con­sec­u­tive quar­ter of de­cline in the re­gion, caused by ever-grow­ing com­pe­ti­tion from lo­cal ri­vals.

Ap­ple’s rev­enue from China fell 14 per­cent to $10.73 bil­lion in the quar­ter, com­pared with $16.49 bil­lion in the same pe­riod last year, de­spite growth in all other re­gions.

Ap­ple’s Amer­i­cas, Europe, Ja­pan and rest of Asia-Pa­cific re­gions saw rev­enue grow by 11 per­cent, 10 per­cent, 5 per­cent and 20 per­cent, re­spec­tively.

Dur­ing a con­fer­ence call with an­a­lysts, Ap­pleCEOTim Cook blamed un­fa­vor­able ex­change rates for the de­cline.

Ap­ple has been fac­ing a grow­ing chal­lenge from lo­cal smart­phone ven­dors in the China market, such as Huawei Tech­nolo­gies Co Ltd, Oppo Elec­tron­ics Corp and vivo Mo­bile Com­mu­ni­ca­tion Tech­nol­ogy Co Ltd.

The US tech gi­ant ex­pe­ri­enced year-on-year de­cline in China last year with its ship­ments to China fall­ing from 58.4 mil­lion phones in 2015 to 44.9 mil­lion in 2016, ac­cord­ing to re­search firm International Data Corp.

Its market share dropped to 9.6 per­cent, while Chinese smart­phone ven­dors saw their market share rise. Oppo sold 78.4 mil­lion smart­phones, with a market share of 16.8 per­cent, rank­ing in first place, then fol­lowed Huawei and vivo.

“Ap­ple has wit­nessed a de­cline in theChi­nese market af­ter it launched the iPhone 6S in 2015, due to a lack of tech­no­log­i­cal in­no­va­tion. How­ever, lo­cal man­u­fac­tur­ers stepped up their ef­forts in up­grad­ing the func­tions of smart­phones and en­hanc­ing their pop­u­lar­ity,” said Jin Di, re­search man­ager of IDC China.

Jin added that Oppo and vivo are at­tract­ing younger cus­tomers with their stylish ap­pear­ance and de­sign as well as lower prices, adding that Ap­ple should ramp up its prod­uct in­no­va­tion.

In its sec­ond quar­ter, Ap­ple sold 50.76 mil­lion iPhones, down from 51.19 mil­lion a year ear­lier. An­a­lysts on av­er­age had es­ti­mated iPhone sales of 52.27 mil­lion.

Its rev­enue rose 4.6 per­cent to $52.9 bil­lion, com­pared with an­a­lysts’ av­er­age es­ti­mate of $53.02 bil­lion, while net in­come rose to $11.03 bil­lion, or $2.10 per share, com­pared with $10.52 bil­lion, or $1.90 per share, a year ear­lier.

Ap­ple is ex­pected to launch its 10th an­niver­sary iPhone range this au­tumn.

An­a­lysts pre­dicted fea­tures like OLED dis­plays, wire­less charg­ing, and even per­haps aug­mented re­al­ity could come to up­com­ing iPhone models.

Jason Low, a tech in­dus­try ex­pert at Canalys, said the devel­op­ment of smart­phones had slowed down, and man­u­fac­tur­ers are pay­ing more at­ten­tion to their de­sign, adopt­ing OLED screens that en­hance pic­ture qual­ity and dual cam­eras.

“It is too early to say whether Ap­ple could help bol­ster its sales in Chinese market,” said Low.


Cus­tomers take photos of iPhone 7 RED at an Ap­ple Inc store in Nan­jing, Jiangsu prov­ince.

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