The Chinese economy hasn’t been doing so well in recent times, and the smartphone industry of the country isn’t immune to those changes. Apple has also bit struck in the region, as its already low market share in the country has taken a bump too. On the other hand, local vendors continue to do well in the country, as customers have started to prefer products with a smaller price tag.
Chinese Consumers Are Switching to Local Brands From iPhone Because of Their Better Value Proposition
With the release of the iPhone X back in 2017, Apple’s smartphones became more of a luxury product and consumers in China are kind of price-conscious, according to the latest report. This prompted the Cupertino giant to reduce the price of its latest offerings in the far eastern country and this reportedly helped temporarily. Meanwhile, the Chinese brands took advantage of the gap left in the below-$800 price segment. However, the price isn’t the only factor driving Chinese consumers away from iPhones, according to industry watchers.
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In recent years, Chinese OEMs like Huawei, Vivo, and Xiaomi have churned out phones which retailers claim sport new and innovative features such as in-display fingerprint scanners and notchless displays. Even camera quality, which historically has been a major selling point of iPhones, is getting better on Chinese smartphones. For instance, last year, Huawei churned out phones with triple camera systems and this year’s P30 Pro would have a quad camera setup. Apple’s highest-end phone in the market, the iPhone XS Max, only has a dual rear camera setup.
As a result, many Chinese consumers have switched to local brands from Apple, but very few are doing the opposite. Last year, Huawei’s market share of the $500-$800 segments went up from 8.8 percent to 26.6 percent in China, while Apple’s share dropped to 54.6 percent from a stronghold of 81.2 percent.
A drop in the market share also means that Apple has fewer people spending money on its App Store and other services in China. On the other hand, better features have enabled Chinese brands to woo consumers outside of their home country as well, including Europe and Asia.
This year’s iPhones aren’t expected to be big on innovations either, with previous info including a triple camera with a smaller notch. Chinese companies, on the other hand, are invested in new trends such as foldable smartphones and 5G-compatible devices, which are in their nascent stages right now, but as better technology and manufacturing processes are available in the future, the products will eventually improve.
Apple is reportedly preparing a 5G-ready iPhone for next year, along with a foldable device. While the California-based giant waits for the technology to mature so it can be perfected, it is possible that this lack of early adoption causes the company to lose further ground in China. Regardless, we’ll have to wait and see how improved the newer models have become when they launch in late 2019, so stay tuned for more updates.
Source: Reuters
