We all know that Apple suffered a decline in iPhone sales in China in Q4 even though China’s economy had been hit hard. A new analytical report recently published showed that Apple had dropped 12% year over year. Yet Apple’s silver lining is that they continue to own the +$800 premium brand segment. They took 80% of that market that actually grew 455% year over year. Unfortunately for Apple, the super premium segment only holds 6% of the total Chinese market.
The performance in this segment was driven by Apple increasing the ASP of new iPhones. Apple grabbed close to 80% market share in this segment, followed by Huawei, which had a 13% market share in the segment. iPhone X was the best-selling model, followed by iPhone XS Max, iPhone XS, iPhone 8 Plus, iPhone XR and Huawei Mate 20 Pro. Apple continued its leadership in the super-premium sector in China monopolizing the top-selling model slots.
in terms of sales value, new iPhones in 2018 managed to generate 24% more value over their predecessors in 2017. The increase in sales value of new iPhones and the growth of the overall super-premium price segment indicate a strong stickiness of a group of Chinese iOS fans. While these iOS fans may have decelerated their device upgrade frequency in recent years, they continue to opt for the premium iPhones when buying a new phone.
Counterpoint’s China Device Switching tracker proves this brand loyalty towards Apple. Our data reveals that 90% of the people who bought an iPhone XS Max were former iPhone users. 50% of that group owned an iPhone 7 plus, iPhone X, iPhone 6s Plus and iPhone 6s.
In September 2018 Patently Apple posted a report based on another Counterpoint report titled “While Apple remains the King of Top End Premium Smartphones they’re Shockingly now a Power Player in the Mid-level Segment.” In Q2 2018 Apple was a clear winner in the $400-600 and on track for another great year in China.
Chinese OEM’s learned and reacted quickly to market conditions in the first half of 2018 in this segment and it’s hear where they hurt Apple during the holiday quarter led by Oppo Huawei and Xiaomi. They made their smartphone offerings in this specific segment more appealing than Apple’s aging iPhone 7.
Lastly, Counterpoint noted that Apple launched new services to further reinforce its closed iOS ecosystem and enhance the stickiness of its brand. Yet with that said, it’s unknown how Apple’s new services beyond ‘Arcade’ will translate in China.
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