Apple Down 35% As Huawei Soars: China’s Blacklist Backlash Continues

From Forbes: Apple’s iPhone sales struggles in China continue, with Credit Suisse analysis on data from the country’s Ministry of Industry and Information Technology suggesting a year-on-year drop of 35% in November. This drop has come despite the Chinese smartphone market being slightly up and follows a double-digit drop in October of 10.3%. Apple’s iPhone sales are being hit by a number of factors—including the timing of the iPhone 11 launch and the lack of a 5G offering. But the main issue hitting iPhone sales is Huawei, which has now captured a staggering 42% of the Chinese market.

As I reported in October, Huawei’s third quarter performance was extraordinary. “Huawei’s sixth consecutive quarter of double-digit growth comes amid a gloomy China market,” market researcher Canalys said of Huawei’s 66% annual growth. And while this surge has clearly stalled Apple’s progress, it has also had a punitive impact on Huawei’s domestic rivals. The context behind Huawei’s success comes down to a patriotic response to the U.S. campaign against the company, as well as marketing and pricing incentives being poured into the market.

But the issue goes beyond Huawei. Apple also trails those other domestic players—Vivo, Oppo and Xiaomi—and its 5.1% annualised market share it record in the third quarter represents a year of decline. There was something of a boost when the iPhone 11 launched, with some strong early sales, but that has not endured. The fact those models do not include 5G connectivity is a major issue for the U.S. giant. “Apple faces a looming challenge,” Canalys warned, “as Chinese vendors and operators drive heavy marketing and promotions around 5G in the next two quarters.” Apple’s double-digit declines in both October and November clearly support that view.

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