China is the main reason for Apple’s poor iPhone sales

China is the main reason for Apple’s poor iPhone sales

Huawei saw its shipments increase 10% on year in the fourth quarter due largely to patriotic support from consumers following the arrest of its CFO Meng Wangzhou in Canada in early December 2018.

Huawei, which briefly surpassed Apple to become the world's No. 2 smartphone brand previous year, led all major brands in China.

Chief Executive Officer Tim Cook has seen China as a key part of Apple's strategy: last fiscal year the company generated nearly $52 billion in revenue from Greater China, a region that includes Hong Kong.

The US-based company's revenue from the iPhone slid 15 percent in the October to December period.

Apple saw its sales in China fall by almost 40 percent on year in Q4 2018, while other local brands saw their sales drop about 20 percent.

In contrast, Huawei, China's largest smartphone maker and occasionally the second most popular phone maker in the world, sometimes third, offers premium phones at a lower price point. His answer was not to report the amount of damage done and not break out detailed numbers on iPhone shipments in its quarterly results.

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Surprisingly, Apple may be spooked enough by the drop in sales to lower its prices. It now holds 11.5% market share, behind homegrown competitors Huawei, Oppo and Vivo. This means that competitively priced, feature-packed phones have caused problems for the iPhone which has become more expensive over time.

In response, the company has announced that it will be introducing price cuts to markets which have been affected by a stronger USA dollar with China likely being one of these markets given that third-party retailers such as are already selling iPhones at 20% lower prices.

Revenue from sales of Macs, Apple's wearables, home products and various accessories also sold well during the quarter. The company said China's move to pause approving new games for the App Store past year is affecting revenue in the segment.

The incredible success of the iPhone X convinced Apple that fans were willing to pay more for its latest smartphones.

Mawston said it is highly unlikely Apple will move any iPhone production to the US.

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