Apple scores win in China due to iPhone sales jump in December
If December’s sales numbers are anything to go by, China may become a bigger piece of Apple’s pie in 2020.
Sales of Apple’s iPhone shot up 18.7% year-over-year in December. Total sales in the country hit 3.18 million units, according to Bloomberg calculations of the Chinese government’s reports.
While some analysts are optimistic about this sales bump, it should be kept in mind that the past several months have been rather difficult for Apple in China. In November, iPhone sales dropped 35.4% YoY. This followed a 10.3% YoY drop in October.
While it’s unclear exactly why iPhone sales shot up in December, there are some massive hurdles Apple needs to clear if it is going to maintain this momentum in the country. The ongoing U.S.-China trade war has hurt the sale of American goods in China, and the iPhone 11 family is one of those hurt by the policy; Chinese markups for the latest iPhones range from 10-23% (depending on the model) compared to their U.S. counterparts.
Add to that the technological and production improvements in Chinese smartphones and the growing popularity of 5G-capable handsets, and it’s clear that Apple has a difficult road ahead of it. Apple has yet to announce plans for a 5G-enabled iPhone, putting it at a disadvantage to competitors’ handsets. Huawei, Xiaomi, and other Chinese firms are starting to release budget-friendly 5G smartphones, something the Chinese market seems to crave.
Apple needs to plan its next moves in China very carefully. Otherwise, they risk losing a foothold in one of the largest consumer markets in the world.