Apple is now an also-ran in the most important smartphone market on the planet.
Last quarter, American consumers bought 33 million smartphones, India accounted for 9 million, Japan bought 8.6 million, and the UK purchased 7.4 million. But one country beat them them all, combined — by almost as many smartphones as the U.S. bought.
That is, of course, China, the world’s leading smartphone marketplace by far, where consumers bought 88.1 million smartphones — 33 percent of all worldwide shipments.
Now Apple, whose iPhone ignited the smartphone market in 2007, is just seventh in China with only 4.8 percent market share. That’s behind perennial competitor Samsung, which owns 17.6 percent of the Chinese market. But it’s also behind global no-names such as Yulong (12.2 percent), Xiaomi (5 percent), as well as Lenovo, ZTE, and Huawei.
That’s what 80 percent global marketshare for Android will do, along with no new products in months. Apple’s international sales are down eight percent in Europe, 14 percent in China, and 18 percent in the rest of Asia Pacific. Sequentially, Apple saw a $3.6 billion drop in China sales this last quarter, from $8.2 billion to $4.6 billion.
Apple CEO Tim Cook, however, was philosophical.
“In the arc of time, China is a huge opportunity. I don’t get discouraged over a 90-day cycle,” Cook said.
The problem is that Apple has delayed its cheaper iPhone too long — probably a year too long. The global market for smartphones grew 50 percent last quarter, according to Canalys, while shipments in China more than doubled to grow by 108 percent. All of this makes sense: 75 percent of new phones globally are being added in Asia and Africa.
“The high end of the market continues to grow but there is no doubt that the explosive growth will come from the low end of the market,’ Chris Jones, VP and principal analyst for Canalys, said in a statement. “Apple needs to respond to this dynamic and it is evident from the performance of its older models this quarter that there is real demand for a new low-cost iPhone. The challenge that it faces is maintaining high margins on arguably the most important products in its portfolio.”
More: MobileBeat 2016 is focused on the paradigm shift from apps to AI, messaging, and chatbots. Don't miss this opportunity: July 12 and 13 in San Francisco.