According to Gartner, smartphone sales touched 380 million units during the first quarter of 2017. The top Chinese smartphone makers, Huawei, Oppo and Vivo, walked away with a major portion of the 9.1% growth recorded during the quarter. The number one player, Samsung (XKRX:005930, Financial), saw its sales decline 3.1% year over year while Apple (AAPL, Financial) registered a marginal increase.
Apple sold 51.629 million iPhones during the first quarter of 2016, which increased marginally to 51.992 million iPhones this year. The problem for Apple is it has only been two quarters since the launch of its new device and sales are already back to lower levels.
Huawei, Oppo and Vivo now hold a combined a market share of 24%, a 7% increase from last year. As Samsung and Apple continue struggling to increase their market share, the Chinese giants are slowly carving out their own positions and are already a formidable trio to contend with, especially in the Chinese market.
China is an extremely crucial market for Apple. With the market becoming more crowded each passing quarter, Apple needs the burgeoning Chinese market to improve its sales numbers.
Source:Businessinsider
Despite concerns about a slowdown in the Chinese economy, the smartphone market continues to grow at a rapid pace. With internet penetration just above 50% in a country with more than a 1.3 billion people, the potential for long-term growth is huge. Unfortunately, Apple and Samsung have already been pushed to the back in the Chinese market, losing ground during the first quarter of this year.
As a premium smartphone, the iPhone is expected to be the top-selling device in any market. Regardless, Apple has sold fewer iPhones in China during the first quarter of this year compared to last year. Considering the growth potential of the Chinese smartphone market, the earlier Apple reverses the trend, the better.
Disclosure: I have no positions in the stock mentioned above, and no intention to initiate a position in the next 72 hours.
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