Technology

Thanks To iPhone 8, Apple Inc. Breaks Six Quarters Of Decline In China

In the U.S., there have not been as many iPhone 8 buyers as the majority of Apple fans were supposedly waiting for the iPhone X. However, in China, it is a different story. For the third-quarter, Apple witnessed a 40% increase in  shipments in Mainland China, according to a private survey.

iPhone 8 buyers
Image Source: Apple.com (screenshot)

iPhone 8 buyers bringing good luck for Apple

A survey by Canalys found that around 11 million iPhones were shipped in the third-quarter against 8 million last year in the same period in China. It must be noted that for the past six quarters, Apple witnessed a drop in sales in the region. Further, Canalys noted that the iPhone 8 buyers must be thanked for the turnaround as the phone contributed more to the sales compared to what the iPhone 7 did at the same point last year. In the United States, however, the iPhone 7 is still popular.

“The high sell-in caters to the pent-up demand of iPhone upgrades in the absence of the iPhone X,” said Canalys analyst Mo Jia. Further, Mo also said that the price drop on the previous models after the launch of iPhone 8 has also been positive for the sales. However, Mo said that Apple “is unlikely to sustain this growth in Q4.”

Mo feels the price tag of $1000 will keep customers in China away from the iPhone X, and that the new iPhone will not repeat the performance of the iPhone 6. The iPhone X will debut next month and China seems to be excited about the same, cranking out the pre-orders minutes after it went live.

“While the iPhone X launches this week, its pricing structure and supply are inhibiting interest.” Though Mo feels that the iPhone X will enjoy a healthy market status, its popularity won’t help Apple in the short-term.

The top five smartphone companies in the third-quarter in China took the massive chunk of the market. Jointly, these companies captured 75% of all the devices shipped in China. According to the analyst firm, Xiaomi is close to making its way into the top three as it is expected to perform well during China’s major online shopping day – 11/11 – and offline retail.

Nothing to worry on demand side

Back at home, things do not look that vivid for Apple as only 16% of the iPhone buyers in the United States opted for the iPhone 8, claimed a recent report from Consumer Intelligence research partners. The number looks grim compared to the 43%, who bought the iPhone 7 in the same period last year.

However, there are no signs of any slowdown in the iPhone demand. UBS analysts believe that the soft iPhone 8 sales are more due to the strong demand for the iPhone X rather than a disappointing demand cycle. The research firm citing the pre-order data, notes that the iPhone X sold in the blink of an eye after it opened for pre-order. Additionally, some buyers have even been asked to wait for several weeks, hinting the strong demand that the phone has witnessed, notes the Telegraph.

However, some analysts do not consider the pre-orders as a reliable indicator of future sales. It is a known fact that the iPhone X might go short on supply, given the complicated parts and other challenges in manufacturing the device.