Perhaps the most telling sign of China’s continued softening smartphone numbers was Apple CEO Tim Cook’s message to investors in early January, citing the decreased demand for phones in the world’s largest market.
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Cook said. “In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.”
Now, tech analysis company Canalys has released a report saying that shipments of smartphones fell 14 percent in China in 2018, which is the second straight year of decrease.
This comes on the heels of five straight years of impressive growth, according to a report in TechCrunch. In 2018, 396 million units were shipped, which is the lowest number since 2013.
“As shipments tumble, the market is rapidly consolidating. The top five smartphone vendors’ market share has increased from 73 percent in 2017 to 88 percent in 2018. Among them, Huawei and Vivo bucked the overall market decline, and grew 16 percent and 9 percent respectively,” the report said.
“Oppo managed to hold onto second place, falling 2 percent but growing market share. Xiaomi ranked fourth, as a disappointing second half caused its full-year shipments to fall by 6 percent. Apple stayed in fifth place with a 13 percent decline in 2018. It still out-performed the market, but this was the worst growth rate in the top five, and Apple’s third consecutive year of shipment decline in China.”
There are two main issues at play here, and the overall picture is nuanced. One, as a market matures and the technology improves, people upgrade less, and keep their current phones for longer. But a bigger issue overall is China's economic slowdown in general, which translates to lower purchasing power as a whole in the country.