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Apple’s delay with the release of the iPhone 12 cost the company $ 100 billion capitalization
In the last quarter, Apple’s revenue in China showed sharply negative dynamics, decreasing by 29% year-on-year. In fact, it has reached its minimum level in five years. This was due to the delay in the release of iPhone models with support for 5G networks, which local consumers have long been ready to purchase. Apple executives believe it can catch up quickly.
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In the third quarter of last year, Apple received 17% of total revenue in China, this year the share fell to 12.2%. Many analysts have expressed concern that Apple has begun to lose ground in the Chinese market, as the main competitors have long presented their smartphones with support for 5G networks, which are already well developed in the PRC. Apple shares after the announcement of the quarterly results fell in price by almost 5%, reducing the value of the company’s capitalization by almost $ 100 billion.
As noted in the report of Counterpoint Research, in the global market, the Chinese company Xiaomi managed to become the third largest manufacturer of smartphones sold, if we consider the results of the third quarter. Although Apple managed to increase its smartphone sales by 11% in sequential terms, it lost 7% in annual sales, passing Xiaomi along the way for the first time in history.
A separate study is devoted to the smartphone market in China. In the domestic market, Huawei remains the leader with a 45% share, Vivo is in second place (17%), OPPO is in third with 15% of the market, Xiaomi is fourth with a share of 11%, and Apple is content with fifth and 8% of the market. although back in the second quarter she went head to head with Xiaomi, since both companies controlled 9% of the PRC market each. But a year ago, Apple’s share did not exceed 7%, so the company can safely write down an increase of one percentage point. Apple CEO Tim Cook admitted at a quarterly event that it was the lack of 5G-enabled iPhone models that led to a drop in revenue in China in the third quarter. Directly, demand for the iPhone 11 grew until mid-September, when it became finally clear that the iPhone announcement would be delayed. In the third quarter, more than half of all smartphones sold in China were 5G enabled, so the lack of a corresponding model in Apple’s range was a deterrent.
Apple executives expressed confidence at the quarterly reporting conference that Chinese consumers will actively buy up the iPhone 12 in the coming quarter, especially the iPhone 12 Pro Max with a large display. Sales of the latter will start only in November, and the continuing shortage of components so far does not allow us to expect that revenue growth from iPhone sales in the current quarter will be significant. In any case, in the global market, it will be measured in units of percent, as Apple executives expect. They did not provide numerical forecasts for the Chinese market.