The Strategist

Apple Relinquish the Lead in China

08/04/2015 - 16:01

In the second quarter, Apple ceded the leadership of the Chinese smartphone market to local companies Xiaomi and Huawei, being now satisfied with third place. Samsung and another Chinese smartphone manufacturer - Vivo - are behind Apple in China.

On Monday evening, the research firm Canalys reported that in the second quarter, the largest manufacturer of smartphones in the Chinese market has become the local company Xiaomi with a share of 15.9%. Another Chinese manufacturer, Huawei, located on the second place with a share of 15.7%. Only after them occured Apple. The third and fourth places in the Chinese smartphone market is occupied by South Korean Samsung and another Chinese company - Vivo, which is a division of BBK. The research company does not specify market shares of Apple, Samsung and Vivo.

The greatest progress in the last quarter in China showed Huawei, whose share increased by 48% - the largest among all the dynamics of the biggest players in the smartphone market of China. Canalys analyst Jingwen Wang said that leading players significantly tightened competition for the Chinese consumer as China's entering in a more mature stage on the smartphone market and is slowing down once the rapid growth. "Therefore, the current leader Xiaomi is under constant pressure from other companies" - said the expert. According to analysts surveyed by FT, the data output of China was the reason for the decline of quotations Apple on NASDAQ by 2.4%.

Last week, another research company, Counterpoint Research, released its report on the balance of power in the Chinese smartphone market, where the leader Xiaomi’s share available at 15,8%, Huawei - 15,4%, while Apple is running in third place with 12, 2%. Counterpoint Research notes that the smartphone market in the PRC decreased by 2% compared with the second quarter last year and 4% - compared to the first quarter of this year. According to experts of the company, it was not only because of the saturation of the market, but also against the backdrop of growing uncertainty about the dynamics of the Chinese economy, which in the past two months has already led to several collapses on the stock exchanges of China.

According to estimates of investment company Canaccord Genuity, which refers to The Wall Street Journal, in the first quarter, Apple earned an operating profit, which amounted to 92% of the world operating profit, earned by all manufacturers of smartphones, combined. A year ago, Apple's share was 65%. In second place in the first quarter is Samsung with a share of 15%.

According to a May report of the research company GfK, the number of smartphones sold increased in the first quarter of this year by 7%. This is a significant slowdown in growth: in the same period last year, sales rose 34%. The reason for this slowdown was the drop in sales in China and developed countries in the Asia-Pacific region. In the first quarter, phablets and smartphones with support for 4G have grown in popularity.