IPhone sales suffered more than most in China last quarter

A logo sits on the case of an iPhone X smartphone on the first day of sale Customers queue at a re:Store Apple Inc. retailer in Moscow Russia on Friday Nov. 3 2017. Supported by resurgent iPad and Mac sales the 10-year anniversary iPhone will help

Apple reported a 19.9% decline in shipments in China for the fourth quarter while Xiaomi fared even worse with a 34.9% decline during the same period.

Shipments of Apple and Xiaomi smartphones in China plummeted during the fourth quarter of 2018 according to a report published by International Data Corporation (IDC) on Monday (via Bloomberg).

Apple blamed falling smartphone sales in China for its weaker than anticipated holiday earnings a year ago, and now new data indicates that the iPhone suffered more than most in the East.

On Jan 29, Apple said revenue for the three months ended Dec 29 was $84.3 billion, off 5 percent from a year earlier.

Apple's latest iPhone models, which are mostly priced above US$1,000, face a tough challenge from Chinese-brand devices that cost about half or a third less.

Apple's decline in the world's largest mobile market was can be attributed to a slowing economy, the iPhone's hefty price tag, and lengthening replacement cycles among consumers. A slowing economy, lengthening replacement times and the iPhone's hefty price tag contributed to the U.S. giant's decline, IDC said according to a Bloomberg report said. This is happening at a time when China's homegrown Huawei is tightening its grip in the market and recently dethroned Apple from the second position in the world's top selling smartphone brands.

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Chief Executive Officer Tim Cook pointed to China as a significant factor in a rare cut in the company's quarterly sales forecast last month. In China, iPhone sales have fallen at twice the overall decline in the smartphone market.

Apple said its services division, which includes iCloud, the App Store and Apple Pay, saw revenue advance to $10.9 billion, up 19 percent over the prior year. "Apple didn't seem to change its Chinese marketing plans". The Chinese slowdown was also the driving factor behind Apple's first revenue outlook cut in nearly two decades.

The shipment numbers for the quarter ending December 2018 are out, and things don't look good for Apple and Xiaomi.

The industry is now counting on innovations such as foldable screens, 3D cameras and 5G-ready phones to revitalise the market.

IDC said the market outlook for this year is not optimistic, and that competition for customers will be severe. "We have a long way to go before they become mainstream".

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