In China, how Xiaomi, Huawei are stealing Apple’s thunder with their cutting-edge innovations

Apple iPhone’s shipment to China dipped by almost 20 per cent in the quarter ended in December 2018. This could be attributed to China’s economic slowdown, changes in consumption structure and also competition from local rivals such as Huawei and Xiaomi. The domestic market contracted 9.7 per cent in the quarter, but Apple declined at about twice that pace, research firm International Data Corporation (IDC) said in a report on Monday. A slowing economy, lengthening replacement times and the iPhone’s hefty price tag contributed to the US giant’s decline, IDC said according to a Bloomberg report said.

Globally, the smartphones market has been witnessing a slump because of the lack of innovation which is discouraging consumers from replacing devices. Samsung, Apple and many others are witnessing the slump. Also, as Huawei has kept its prices competitive, Apple is facing tough competition on the price front. Apple also didn’t seem to work on its Chinese marketing plans --- an area that needs constant updating.

In the recent past, Apple slashed down prices of its latest iPhones by as much as 20 per cent to woo consumers, a move that is seen as unusual. Revenue from the iPhone slid 15 percent in the October to December period. To compensate for the loss, Apple is trying to replace phone sales with revenue from services.

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Chief Executive Officer Tim Cook has seen China as a key part of Apple’s strategy: last fiscal year the company generated almost $52 billion in revenue from Greater China, a region that includes Hong Kong. But with the country announcing its slowest economic growth since 2009, Apple said its sales fell 27 per cent in the holiday quarter. The Chinese slowdown was the driving factor behind Apple’s first revenue outlook cut in almost two decades. Cook, however, emphasised the long haul, highlighting 19 per cent growth in services revenue, the Bloomberg report said.

Huawei had briefly trumped Apple to get to the No. 2 spot in the world.  It shored up its lead after unit shipments soared 23.3 percent in the December quarter, leading all major brands, according to IDC. 

HIGHLIGHTS

• China's domestic market contracted 9.7 per cent in the last quarter of 2018.
• However, Apple declined at about twice that pace.
• Apple slashed down prices of its latest iPhones by as much as 20 per cent.