Apple Seeing Growth in iPhones in China, But for How Long

When Apple posts its quarterly earnings late this week, it might have a bright spot that will surprise many – China.

Estimates made by Canalys expect the smartphone shipments from Apple to China to increase to over 11 million units compared to 8 million for the same period one year ago, due to prices being less for older iPhones. The increase follows six consecutive quarters of drops.

China is now one of the markets that is most competitive for smartphones in the world. In August, Apple posted sales that dropped 10% for greater China from the year before.

While brands from China such as Oppo, Vivo, Xiaomi and leader Huawei have struggled gaining traction within the U.S., they are all outpacing Apple for units sold in their own backyard, according to research from Canalys.

Chinese consumers use apps such as WeChat to perform some of the function of the operating systems for Apple.

Apple will reports its fiscal fourth quarter earnings Thursday and typically breaks out its revenue by regions, but when it comes to devices sold, it only provides one global figure.

CEO Tim Cook last year said China would be an important factor in the growth of Apple moving forward. Earlier in 2017, the Cupertino, California based Apple promoted Isabel Ge Mahe to vice president and managing director for Greater China. She reports to Cook and to COO Jeff Williams.

We are quite bullish on China, said Cook last October during its then earnings call. We continue seeing a booming middle class in China.

However, the research firm said it was skeptical that its forecast growth of close to 40% in units of iPhones is sustainable in China. Due to the company entering the holiday season, which is highly competitive, with a new iPhone, the iPhone X, that is expensive and is said to be facing issues with supply.

The growth for Apple this quarter is just temporary said an analyst in China. The analyst noted that while the launch of the iPhone X takes place this week, its pricing and supply are making it become inhibitive.

The smartphone industry worldwide has become highly competitive and in China that it is evident that Apple will have its hands full, as four or five local companies as well as other international brands such as Samsung fight for market share.