Apple Losing its Edge on Chinese Smartphone Market
In less than six months after Apple launched their latest series of iPhones, the US company is now cutting down its production due to lack luster sales. Analysts area saying that iPhone shipments in China, one of Apple’s biggest market is said to fall in the coming months. Beijing based smartphone analyst James Yan of IDC China stated that shipments for January is facing a significant slump compared to a year ago when the iPhone 6 and 6 Plus were the company’s flagship devices.
First quarter shipments are greatly lower than a year ago as buyers are already looking forward to the next generation of smartphones to be released. Apple is reducing output of the iPhone 6S and 6S Plus by 30 percent in the first quarter compared to their original plans, although retailers still get a chance to clear out its pending inventories as suppliers see steep cuts in orders. Stocks of Apple and its major suppliers such as Pegatron Corp and Sharp Corp. fell last Wednesday as Chinese mainland suppliers stayed afloat as the stock market advanced.
No comments are heard from Apple as of the moment and Nicole Peng, the director of Canalys China said that the scale back has limited impact on Chines suppliers since most of them are tied up with local smartphone companies. Although production will hurt the confidence of the channel and supply chain, still many Chinese suppliers are already in partner with firms such as vivo Mobile Communications Technology, Huawei Technologies that are now focusing on high end products.
Apple was the largest seller of smartphones in China for the first quarter of last year, with shipping of 14.5 million devices due to the strong acceptance of the iPhone 6 series that were compatible with the newly launched fourth generation telecom technology, but its market share was quickly eroded by Huawei and Xiaomi as these Chinese firms released cheaper but high quality smartphone handsets.
Apple is opening brick and mortar stores in smaller Chinese cities and announced plans in introducing a mobile payment system Apply Pay to China in as part of their efforts to lift their presence in the market.