After six consecutive quarters of declining sales in China, Apple is finally seeing growth. With the launch of the iPhone 8 in China, Cupertino is enjoying a dramatic 40 percent increase in sales, year-over-year, according to research firm Canalys.
Impressive Growth That Could Be Short-Lived
Apple’s growth this quarter is only temporary. The high sell-in caters to the pent-up demand of iPhone upgraders in the absence of the iPhone X.- Mo Jia, Canalys
Third-quarter sales in China, according to Canalys, rose to 11 miillion. The same quarter last year, sales in China were only 8 million. Research analyst Mo Jia reports that the growth might be short-lived in spite of the excitement over the iPhone X. The analyst believes iPhone 8 sales in China are the result of “pent-up demand of iPhone upgraders” who won’t or can’t wait for the iPhone X.
The fourth quarter might not be so impressive, Jia warns, because the pricing and supply of the iPhone X are “inhibiting.” Whereas sales of the iPhone 8 in China are strong, Jia believes the new iPhone X will only enjoy a strong gray market presence at first, one that won’t help Apple’s fourth-quarter revenues.
The iPhone 8 in China Compared to the United States
Regardless, sales of the iPhone 8 in China have proven markedly better than the device’s predecessor. That’s a stark contrast to the situation in the United States. In the US, we’ve even seen reports of Cupertino cutting production of the iPhone 8 and iPhone 8 Plus by as much as 50 percent.
According to 9to5Mac, research firm Consumer Intelligence Research Partners (CIRP) suggests that the iPhone 8 has been selling worse in the US than an “S” model might have sold. In fact, the firm’s numbers suggest that more consumers are purchasing the iPhone 7 and iPhone 7 Plus than the newer model. Of course, those figures are based of a sample size of only 500 Apple customers. While that’s a high enough sample size to be considered “statistically relevant,” it’s hardly representative of the overall population.
Despite Growth, Apple Lags Behind Competitors
Even though Apple enjoyed such sizable growth for 2017 Q3 in China, Cupertino is still lagging behind its biggest competitors there. Huawei is dominating smartphone sales, with Oppo, VIvo, and Xiaomi slightly behind. Apple finds itself lagging in fifth place.
Canalys believes that Xiaomi is “poised to break the dominance” of the top three manufacturers, making the battle for first place even more competitive than it already is. Since the iPhone X’s pricing and supply constraints are unlikely to make it a serious contender, Apple might have to continue settling for the fifth spot in the smartphone sales analytics arena.