Apple had many people crazy about its iPhone in China, who used to consider the device a status symbol. However, things are not the same for the Cupertino-based company, which is having a tough time now impressing consumers in China. On Tuesday during its first-quarter earnings call, the U.S. firm revealed a decline of 11% in iPhone sales in Mainland China on a year over year basis.
Apple losing shine in China
Apple used to signify wealth and fashion in China, and many people there updated their smartphone each year. But this year has been different as many held back to wait for the next iPhone.
“Everyone bought a 6 series,” Steven C. Pelayo, a technology analyst at HSBC in Hong Kong, told The New York Times. They “were less inclined to upgrade to a 6s, which only had very minor changes,” he added.
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Apple report that sales had seen a massive decline compared to last year. In the first quarter of 2015, sales were 80% higher than 2014. The decline this year is a setback for the U.S. firm, which is among the most beloved brands in China.
Analysts say that young, middle-class consumers in China are increasingly willing to try smartphones from competitors such as Huawei, Meizu and Xiaomi. These brands seek to compete with Apple on technical specifications and aesthetics, but they sell their devices at amazingly low prices.
For many Chinese consumers, phones are a part of their personal identity, and they are willing to take a look at a broad range of available models. This creates immense pressure on the iPhone maker, which will now have to fight to maintain its dominance in the high end of the market.
Growing problems in China
There are other obstacles as well for Apple in China. For example, a Chinese regulator recently blocked its iBooks Store and iTunes Movies services in the country. These services were just six months old there. It seems that the Chinese government will further pressure Apple since it has increased scrutiny of American companies within its borders.
Over the past four years, Apple has seen huge demand for its products in China. Therefore, it has increased the number of retail stores there to 35 from just a handful and expects to stretch the number of stores to 40 by the end of June. China is the second largest market for Apple after the U.S.
On Wednesday, Apple shares closed down 6.26% at $97.82. Year to date, the stock is down by almost 9%, while in the last year, it is down by almost 25%.