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For the first time in seven years, Apple is not among the top two smartphone manufacturers in the world. For the first time, a Chinese company is.
Analysts from several research groups, including IDC, Canalys and Counterpoint, all agree that Huawei surpassed Apple to take second place behind Samsung in the global smartphone market last quarter, measured in unit volumes.
The news shone what was otherwise a positive day for the iPhone maker because Apple reported better than expected quarterly earnings.
The resurgence of Huawei, although it is closed from the US market criticized by the US national Security concerns underline the lingering threat that China continues to weigh on Apple's strength, whether in the form of local competitors or world politics. "Apple is not in a very comfortable position," commented Nicole Peng. at the market researcher Canalys. "Consumers have to make a difficult choice between Apple and its peers in China."
Apple's overall positive performance over the last quarter was largely driven by the iPhone X, which boosted revenue by 17% the same period last year – even though sales of its smartphones increased by only 1%.
"The iPhone X shows that when one delivers a brilliant and innovative product [and] there are enough people who like it, [then] it can be a very good deal," Tim Cook said Tuesday. , the CEO of Apple. conference call with analysts. Investors seemed to agree, which boosted their shares by 4% Tuesday night.
Parallel to the rise in the average selling price of the iPhone and to the explosion of its online services, one of the key elements of the revival of business activity. Apple in the last 12 months has been its recovery in China. It has now recorded four consecutive quarters of double-digit revenue growth for its Greater China division, which includes Hong Kong and Taiwan.
In August 2017, Apple's revenues in China were steadily declining for 18 months. Many observers were willing to cancel Apple on the world's largest smartphone market, suggesting that it was the last American tech company to be a victim of more agile local rivals.
Nevertheless, Mr. Cook insisted that China and its middle class The potential of the iPhone has been attributed to the temporary slowdown in the business largely due to the decline in tourism spending in Hong Kong.
According to Apple's own parameters, he was right. Greater China's revenue returned to growth in the quarter ending September 2017 and has increased by approximately 20% over the last six months.
"There are a lot of good things out there," Cook said before embarking on an unusually four-minute sermon on tariffs and the nascent trade war between the United States and China. "I'm sure some people have questions about it," he suggested.
Although the iPhone has so far not been affected by the tasks proposed by the Trump administration on Chinese imports to the United States, other products like the Apple Watch, the AirPods and HomePod headphones could be affected by the latest wave of proposals.
million. Cook said that Apple "would share our views" with the White House on the last $ 200 billion of tariffs. "We are evaluating that one," he said, adding that it was a "tedious process" to analyze the impact not only on Apple's products, but also on price increases from its suppliers, such as data center providers.
"Our view of tariffs is that they appear as a tax on the consumer and result in lower economic growth and can sometimes result in a significant risk of unintended consequences," Cook said. , suggesting that Apple could raise prices While acknowledging that some US trade relations need to be "modernized," he said that the US and China have an "inevitable reciprocity" Which binds their fortunes together. "The world needs both the United States and China to prosper so that the world is doing well … We hope the calm heads will carry it."
The time that Mr. Cook Tuesday's call for tariffs says more about his concerns – and those of his investors – than about his own words.
But US tariffs, and potential retaliation against Apple in China, are not the only risk Apple faces there.
"Overall, the Chinese smartphone market has really reached a fixed point right now.In terms of growth, it's nonexistent," said Wayne Lam, an analyst at IHS Markit, a market researcher.
million. Lam believes that Apple can cope well with the new phase of "replacement" of the Chinese market, consumers switching from less-efficient devices to more sophisticated iPhones.
"Apple can still demand and get the most expensive and valuable devices that Android manufacturers can not," he said. "From this point of view, Apple has a very good future, but in terms of the absolute volume of phones, it is clear that they do not buy as much."
However, Ms. Peng at Canalys is more pessimistic about Apple's longer-term prospects in China. "We have not seen a rebound in the popularity of the iPhone," she said, in terms of units.
Apple could have boosted its revenue by raising the price of the iPhone this year, and an even more expensive iPhone, with a larger one than the X, is expected to arrive in September. But with rivals like Huawei and Xiaomi improving their hardware while keeping prices low, analysts say Apple may be hard-pressed to locate in more cost-conscious markets such as China and China. # 39; India.
Even at the upper end of the Chinese mobile market, there is a "two-horse race" between Huawei and Apple, Ms. Peng said. Samsung, based in South Korea, said earlier this week that sales of its flagship Galaxy S9 product had underperformed, although it remained the world's largest smartphone maker.
"There is a growing level of patriotism among Chinese consumers," she said. "Apple has less appeal now."
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