Apple Drops to Fifth in China’s Mobile Market as Locals Rise

Apple's iPhone Drops to #5 in China Market
  • Huawei extends market leadership with 17.3% of shipments
  • Oppo nearly doubles share to be fastest growing major brand

Apple Inc. dropped to fifth place in Chinese smartphone shipments, losing ground in its biggest overseas market in a fresh blow for the technology giant.

IPhones made up 10.8 percent of devices sold in May, down from 12 percent a year earlier, according to Counterpoint Research. By comparison, Chinese vendor Huawei Technologies Co. increased its lead with 17.3 percent.

Chief Executive Officer Tim Cook has publicly touted the importance of China, where the company is combating a slowing domestic economy and local vendors with increasingly popular devices. The launch of the cheaper iPhone SE was meant to boost Apple’s popularity in developing markets and Cook met with China’s vice premier Liu Yandong in May.

Instead, it has suffered commercial, legal and regulatory setbacks in recent months leading to lawsuits and key products getting shut down.

Local brands Huawei, Vivo, Oppo and Xiaomi are now the top four smartphone makers in China with a combined market share of 53 percent, according to Counterpoint research director Neil Shah. Oppo almost doubled its market share to 11 percent.

Apple’s sales in Greater China, which also includes Taiwan and Hong Kong, fell 26 percent during the March quarter compared to a year earlier, amid a slowing market.

Apple lost a patent case against a little-known Chinese rival relating to its iPhone 6 and iPhone 6 Plus, along with a trademark dispute relating to the use of ‘IPHONE’ on leather goods. The company was forced to shut down its iTunes Movies and iBooks services in April - six months after they were first permitted.

Its app store and other services are also being increasingly regulated. The Cyberspace Administration of China last week released rules stating app stores must ensure the commercial viability of developers, who in turn must monitor customer usage.

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