China has lately evolved into an extremely competitive smartphone space thanks to the sudden rise of fresh local OEMs. Established brands have been experiencing major hurdles for succeeding in the dense industry. Apple too has been losing grounds in the biggest overseas market and a recent Counterpoint Research report revealed that the Cupertino giant fell down to the fifth spot suffering from a marginal decline in shipments.

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Apple was responsible for 10.8% of smartphone shipments in May, dropping from 12% at the same time last year. Specifically in Greater China, revenue for Apple dipped 26% during the first quarter servicing for the first time, a significant quarterly corporate decline since 2003. Primary reasons for the downfall involve remarkable growth for local vendors like Huawei leading with 17.3 percent and Oppo who doubled its sales at 11%. The top four positions now withhold solely by Chinese manufacturers sustaining 53% of the smartphone shipments including Huawei, Vivo, Oppo, and Xiaomi respectively, according to Counterpoint research director Neil Shah.

Furthermore, Apple lost exclusive rights in a potential patent case over the trademark dispute against a Chinese rival that employed the use of “IPHONE” on its leather goods. Additionally, the company had to close its iTunes Movies and iBooks services earlier in April and has been facing constant regulatory issues with the App store. The iPhone SE which was supposed to drive customer attraction in developing countries failed to take off due to its compact form factor and the availability of better alternatives from competing brands. The overly saturated industry of China has also been creating havocs for these leading brands. Chief Executive Officer, Tim Cook has publicly blamed “significant channel reduction” and “currency weakness” for dropping numbers in China. Moreover, Apple might soon terminate sales for the iPhone 6 and 6S Plus in Beijing as the Intellectual Property Office claimed a violation of the design patent by a Chinese phone. In a nutshell, it is becoming increasingly difficult for Apple to sustain in the Chinese market due to the aforementioned reasons but the very fact that China is the biggest smartphone market just makes the whole struggle worthwhile.

 

 

Source: Bloomberg
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Shubham is based out of Ahmedabad, India and is studying to be a Computer Engineer, while specializing in mobile applications. He loves covering what's new in the smartphone space and aims to make it his primary profession some day.