Apple Inc (NASDAQ:AAPL) is struggling hard to sustain its growth in China as other competitors like Huawei and Xiaomi Corp. have made low cost phones with same specifications. Apple Inc will announce its quarterly results on 26 July in which drop in iPhone sales in China will be disclosed.
Huawei is getting the largest market share in China by jumping over Apple Inc (AAPL) and since May has supplied four new phones. In the same time, Guangdong Oppo Electronics Co.’s share boosted 8 percent.
“It’s a function of cheaper phones becoming good enough,” said Abhey Lamba, a San Francisco-based analyst at Mizuho Securities who recommends buying Apple shares. “Apple has done well at the upper end, but there’s not much more growth at the upper end of the market.”
Abhey Lamba, analyst at Mizuho Securities, said “It’s a function of cheaper phones becoming good enough. Apple has done well at the upper end, but there’s not much more growth at the upper end of the market.”
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To attract new customers in China, an emerging market, Apple Inc (NASDAQ:AAPL) has launched its iPhone SE with cheap rates but results are still under expectations. New iPhone with increasing popularity of the App Store may help Company to boost its sales in China. And again Huawei and Oppo are getting ahead with their launch of new phones.
According to researcher AppAnnie, IOS App Store has been giving benefit as people prefer to purchase Apple hardware to save those paid downloads. App Store has become famous as China is surpassing Japan to become the second-largest source for mobile games, services and more.
However, price of iPhone is a real issue. Huawei’s best P9 costs 3,688 yuan, with 64 GB of storage whereas a 16 gigabyte iPhone 6S has a price of 5,288 yuan. iOS mobile operating system is another reason to attract the unpredictable Chinese consumers as it allows very low personalization as compared to Android.
Sales in China’s mainland, Taiwan and Hong Kong, declined 26% in the fiscal second quarter. Revenue is expected to tumble by 15% in the three months through June as relative to the last year. Apple Inc (AAPL) stated that the decline is mainly due to the Hong Kong dollar.
Apple Inc (NASDAQ:AAPL) was enforced to close its iTunes movies and iBook services due to strict regulations in China. Apple CEO visited China in May with $1 billion investment and has Apple made efforts to keep good relations with the Chinese government.