Connect with us

Company News

Apple defies China’s smartphone slump to post strong third quarter sales

Apple was the only winner among China’s struggling smartphone vendors in the third quarter, with strong sales of the iPhone 14 drawing a sharp contrast to the weak performance of domestic brands, according to market research firm Canalys.

Overall smartphone sales in China plunged 11 per cent year on year in the third quarter, according to data published on Thursday. Apple posted 36 per cent sales growth in the period thanks to its new iPhone 14 Pro, said Canalys. In contrast, popular Chinese brands Oppo and Vivo saw sales drop 27 per cent and 23 per cent, respectively, while Honor, a spin-off brand from Huawei, dropped 16 per cent. Xiaomi did slightly better, with its sales down 17 per cent year on year for the quarter.

The Canalys figures were in line with market data from other sources that point to continuous weakness in China’s smartphone market. On Wednesday, the China Academy of Information and Communications Technology, a government think-tank, released data that showed smartphone sales in the country plunged 21.9 per cent year on year to 19 million units in August.

China’s smartphone market remains the world’s largest, accounting for a quarter of global sales, but the slow sales reveal how consumer sentiment has suffered under Beijing’s strict Covid-19 controls. More importantly, the weakness spells trouble for upstream sectors such as semiconductors.

Slowing demand for memory chips, for instance, is casting a shadow over business prospects for South Korean suppliers SK Hynix and Samsung Electronics, which both have China-based wafer fabs.

SK Hynix said this week it plans to cut next year’s capital expenditure by half after reporting a 60 per cent decline in third-quarter profit on plunging demand for memory chips. Larger rival Samsung reported its first profit drop since 2019, and signalled that it does not expect demand to recover next year either.

“Asian component vendors [will] be hit by the downturn in smartphone shipments this year,” said analysts at Fitch Ratings.
In terms of absolute sales volume in China, the Canalys report said Vivo and Oppo remain the two largest players, followed by Honor, Apple and Xiaomi in fifth spot.

Canalys analyst Toby Zhu said the Chinese smartphone market will remain flat or achieve only slight growth in 2023. “Vendors have been suffering from rapidly declining demand and high inventory over the past quarters which has severely damaged confidence in the overall supply chain,” Zhu said.

The deep contraction in China’s market contributed to a 9 per cent year-on-year drop in global smartphone sales in the third quarter, according to Canalys. South China Morning Post

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2022 Communications Today

error: Content is protected !!