iPhones in China are being snapped up by the Bling Dynasty

29 Apr 2015

Apple Store Hong Kong image via Shutterstock

China’s rising millionaire and billionaire classes just can’t get enough of the iPhone, with the country proving to be the biggest growth engine for Apple in the latest quarter, edging out rivals like Samsung, according to Juniper.

China played a huge role in Apple’s impressive Q2 performance. And, while sales of iPhone devices surged 71pc in the last quarter, rival Samsung saw a 4pc decline in shipments in the crucial region.

As well as the iPhone onslaught, Samsung faces competition from homegrown Chinese smartphone makers such as Xiaomi, OnePlus and Lenovo, which last year acquired Motorola Mobility from Google.

Although Samsung retained leadership of the smartphone market, the company’s shipments fell to less than 82m.

Furthermore, although its market share rose quarter-on-quarter to 23pc, this is well down on the 29pc it commanded at this time last year. Meanwhile, increased sales in its smartphone division – bolstered by uptake of the A-series – were in part offset by declining tablet and feature phone sales.

Nevertheless, Juniper Research expects Samsung’s performance to improve in the coming months – the S6 and the S6 Edge have had a better reception than the S5, as well as boasting new features in the case of the S6 Edge, and have several international markets to break into.

China’s rising classes just love Apple

Apple achieved record Q1 iPhone shipments of more than 61m, up by 40pc year-on-year. In large part, growth was fuelled by a dramatic surge in sales across the greater China region, where device sales rose by 71pc compared with Q1 2014, resulting in revenues for the region of US$16.8bn.

The rising middle and millionaire classes in China drove Apple’s sales in that country, which grew by 71pc to US$16.8bn. Apple launched the iPhone 6 in China last autumn with a number of carriers. In fact, China is now Apple’s second-biggest global market after the US, not Europe.

The Chinese market for Apple products is growing three times faster than Europe or the Americas. Apple opened five new stores in China during the first quarter and plans to add 40 new retail locations across China by 2016. App Store revenue grew 100pc in China over the last year and developers in China have earned more than US$5bn from Apple.

Now would be a good time to be big in China

BlackBerry’s decline continued, with shipments at an estimated 1.5m for the quarter.

Juniper also pointed to hard times for Microsoft’s Lumia brand – cancelling the Asha brand has resulted in an overall year-on-year decline of nearly 40pc to less than 9m units.

Competition among Chinese vendors intensified, with Xiaomi posting 14.2m devices, and Lenovo relaunching the Motorola brand in China in January.

Juniper Research anticipates a big quarter ahead for several vendors – the Apple Watch is accompanied by several flagship releases, such as Huawei’s P8, the HTC One M9 and the Xiaomi Mi5.

Apple Store Hong Kong image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years