China is currently hurting Apple with their iPhone sales. Apple’s entire smartphone industry is suffering in this country, according to a study made by CAICT (China Academy of Information and Communications Technology, an agency of the Ministry of Industry and Information).
According to its surveys, smartphone deliveries to Chinese distribution channels fell by 15.5% in 2018 – or 390 million smartphones – and even by 17% in December.
The research firm Canalys, for its part, estimates a decline of around 12% over the past year. They expect the overall volume to fall below 400 million units in 2019. Deliveries would drop by an additional 3% and would confirm a trend observed over the past 3 years.
Poor results and sales trends !
Canalys explains this by pointing to a Chinese market that is now well equipped and where customers change their phones less often, a practice that could even be a long-term one. The firm is also skeptical about the chances of the high-end segment throughout the next six months.
Apple has suffered much from this situation, continues Canalys, talking about stiff competition from local players, who combine attractive prices with high-performance and well-equipped terminals.
Bank of America Merrill Lynch (BAML) analysts cited by Bloomberg are concerned about a possible “informal boycott” by Chinese customers of Apple, as part of a more general ban on American products.
Less interest from Indian and Chinese markets
A survey conducted by BAML with customers in China and India would highlight a more significant interest in Xiaomi and Samsung than Apple in the prospect of equipment renewal. This risk would add to the economic problems and the rise in the price of American products.
The main interested party does not share this opinion. In an interview with CNBC last week, Tim Cook expressed his doubts about the idea that Chinese customers intend to ignore Apple. Here and there, perhaps, he conceded, but on a general level, he considers China as the United States. That is to say, countries that are anything but “monolithic” and where everyone has their own opinion on different subjects.
As a sign that Apple’s slump is no exception, Samsung Electronics has confirmed that its results for the last quarter of 2018 will be below expectations. Yesterday, the profit that was forecast by analysts for this period reached 13,300 billion won or 10.37 billion euros. Samsung finally left to announce 10,800 billion won (about €8.4 billion).
The health of its smartphone business is not detailed (Samsung’s market share in China does not exceed 1%, compared to 9% for Apple). Although it is less subject to the peculiarities of its telephone sales, as a supplier of components such as memories, South Korean’s activity is indexed to that of other players and its competitors.
Samsung is expected to launch an ambitious new Galaxy line-up in the coming months, but if Canalys’ bleak prospects for the premium smartphone segment are confirmed, things will remain complicated for South Korea and California.