SHANGHAI (Reuters) – Apple Inc and Huawei Technologies [HWT.UL] each captured a higher share of China’s smartphone market in the first quarter, according to data from research firm Canalys released on Friday.
FILE PHOTO: People wearing protective masks are seen in an Apple Store, as China is hit by an outbreak of the new coronavirus, in Shanghai, China, January 29, 2020. REUTERS/Aly Song
Total smartphone shipments in the country in the three months ended March fell 18% from a year earlier to 72.6 million, the data showed, as the coronavirus outbreak took a toll on Chinese supply chains and consumer demand.
China’s Huawei, the No.2 smartphone seller in the world by volume, grabbed 41.4% of the domestic market, up from 33.9% a year earlier. Its overall unit shipments rose about 1% to 30.1 million.
That growth came at the expense of Android rivals Oppo, Vivo, and Xiaomi Corp. The three companies saw shipments plunge by 26%, 19%, and 26%, respectively.
All four companies rely significantly on overseas sales for revenue, although Huawei will depend on the domestic market increasingly as its latest devices do not run the complete suite of Google Mobile Services due to restrictions placed on it by the U.S. government.
Apple shipments sank more than 4%, marking a significant dip but below the industry average. However, its share of the market grew, hitting 8.5% from 7.3% last year.
Apple reported sales and profits that beat Wall Street expectations on Thursday, with Chief Executive Officer Tim Cook saying China sales were “headed in the right direction” as the country reopens from restrictions imposed to curb the outbreak of the novel coronavirus.
Apple is expected to release its first 5G phone later this year. Online retailers in China recently slashed prices of the iPhone 11, and analysts said the company’s new, mid-range iPhone SE was selling better than expected in the country.
After enduring years of market contraction, Chinese Android smartphone players were hoping that releasing new 5G models would prompt consumers to purchase new devices.
But analysts now expect consumers will delay purchasing 5G phones, opting instead for cheaper, still serviceable 4G devices as a coronavirus-induced recession looms.
“Looking ahead, we remain cautious about the speed of recovery in China’s smartphone market this year, and maintain our best-case scenario of 326 million shipments for 2020, including 137 million 5G smartphones,” said Nicole Peng, vice president of mobility at Canalys.
“The macroeconomic situation is a huge red flag for China’s market players this year.”
Market research firm TrendForce said on Thursday it expects 2020 smartphone output globally to slump 11.3% to 1.24 billion.
Reporting by Josh Horwitz; Additional reporting by Shanti S Nair; Editing by Aditya Soni