Technology

iPhone X Boosts Apple’s Popularity In China, Shows Survey

iPhone X Boosts Apple's Popularity
Image Source: Apple.com (screenshot)

The iPhone X sales have been a topic of great debate in the last few weeks. Apple CEO Tim Cook claims the iPhone X sales “surpassed our expectations” and that the anniversary iPhone was the top selling phone in every week since its launch. In contrast, Wall Street analysts and supply chain reports suggest the iPhone X sales were far below expectations during the holiday quarter. Now an exhaustive survey conducted by FT Confidential Research (paywall) reveals that the 10th anniversary iPhone has given a big boost to Apple’s popularity in China, the world’s largest smartphone market.

Apple is right behind Huawei in terms of popularity in China

The FT Confidential Research’s survey (via Nikkei Asian Review) shows that the iPhone X packs sufficient innovative features to persuade consumers to fork out additional money for the premium smartphone. According to the survey, Apple was the second most popular smartphone brand in China, only behind Huawei. Apple saw its popularity rise from about 24% in September 2017 to close to 26% in January 2018.

The iPhone X has been a massive success in China, says the FT Confidential Research.  A total of 76% iPhone users who participated in the survey said their next smartphone would be an iPhone. Among people from high-income households, close to 60% participants said their next iPhone would be the iPhone X. The phone has a starting price of $1,334 in China, but the high priced hasn’t deterred loyal Apple fans.

The FT Confidential Research said close to 10% of Chinese iPhone owners who participated in the survey have already purchased the iPhone X. Another 50% said they were planning to buy the anniversary iPhone. Soon after the unveiling of iPhone X in September 2017, only 30% iPhone users were interested in the all-screen iPhone. The survey also suggested the iPhone 8 and 8 Plus demand had slowed considerably in China.

Discounts offered by retailers as well as the ability to pay for the device in installments has made the iPhone X an attractive option for the younger fan base. Nikkei Asian Review points out that retail giant Suning is offering CNY 600 discount on the 256GB iPhone X. The anniversary iPhone with its incredibly high price tag has been testing the resolve of Apple fans in the world’s largest smartphone market.

Smartphone sales decline 4.9% in China

Apple’s popularity inched up in China even as the Chinese smartphone sales declined for the first time since 2009. According to research firm IDC, smartphone sales plunged 4.9% in 2017 compared to the previous year. The falling smartphone sales in the world’s largest market could be a big blow to vendors such as Samsung, Apple, Huawei, and others. The most affected are the vendors that make low-cost smartphones.

Consumers are holding on to their phones longer than before. According to IDC, the Cupertino company continued to dominate the premium segment for phones with price tags above $600. Even though the number of smartphones sold in China fell 4.9% in 2017, the value of devices jumped from $120 billion in 2016 to $134 billion in 2017. It means consumers are shelling out more money for premium features.

IDC pointed out that the iPhone X with a $1,334 base price in China is still out of the reach of most consumers. Yuanta Securities analyst Sam Kao expects shipments to decline further in 2018. Sam Kao estimates global smartphone shipments would go down by 2% this year. The Chinese brands would witness a 4% decline in shipments. Kao told investors that the Chinese smartphone market has become saturated.

Huawei was the largest smartphone vendor in China last year as its sales skyrocketed 18.6%. It was followed by Oppo and Vivo, both of which are owned by BBK Electronics. Xiaomi was the fourth largest smartphone brand while Apple sat on the fifth spot. While all other brands mostly target the mid-range and low-end markets, Apple focuses primarily on the premium segment.

In its latest earnings call, the tech giant revealed that it sold 77.3 million iPhones during the holiday quarter, down from 78.2 million shipped in the same period a year ago. The fact that Apple sold fewer iPhones in the latest quarter has sparked speculations that the iPhone X sales might indeed be lower than expected. Both the Wall Street Journal and the Nikkei Asian Review have claimed that Apple had reduced iPhone X production by 50% in January-March quarter from 40 million to 20 million units.