How Apple dominates the Chinese mobile phone market with 80% profits


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According to the mobile phone sales report released by Counterpoint, Apple’s iPhone has a 20% share in the Chinese market. Well, this is a pretty decent market share considering that all the Chinese mobile phone brands put together do not have up to 20% market share in the U.S. The most interesting part of Apple’s 20% market share in China is that it claims 80% of the profits. The previous global mobile phone report released by market research firm Canalys pointed out that the fourth quarter of 2022 will be the worst quarter in the worst year for the global mobile phone market in ten years.

Though there is a general decline in the mobile phone industry, Apple sales continue to increase. It has a 6% year on year increase with a market share of 19.9%. Also, the company account for about half of the mobile phone market. The report from Counterpoint also reveals that iPhone profits account for over 80%. This is also 72 percentage points more than the second-ranked Samsung.

Apple

iPhone ASP approach $1000

As for its Average Selling Price (ASP), in the first quarter of this year, the iPhone ASP hit $988. This is an increase of 12% year on year. CIRP analysts point out that Apple has been able to drag more users to buy high – end mobile phones. It does this by boosting its product portfolio and offering rich recycling programs.

What is happening in the Chinese mobile phone market with the iPhone obeys Pareto’s Distribution. This states that 20% of actions are responsible for 80% of consequences. These 20% “actions” are the most important in the market and have a decisive impact. We can also see this in our everyday life. In many cases, only 20% of people or less in society take 80% of the social wealth. Similarly, 20% of the top brands in the market take 80% of the market share.

Apple has always done well in China

Apple‘s iPhone has been a popular smartphone in China for years, and its market share and profit have fluctuated over time. Let us explore the current state of the iPhone market share and profit in China, using the latest data from various sources.

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Apple’s Highest-Ever Market Share in China

According to AppleInsider, Apple has become China’s top smartphone vendor for the first time since Q4 2015, with the iPhone getting its highest-ever market share of 23%. This is a significant increase from 2019 when Apple was warning of severe sales problems in China. Counterpoint Research claims that not only has Apple become China’s biggest smartphone brand, but it has also beaten its own record for market share in the country.

The iPhone 13 has led the success due to a relatively lower starting price at its release in China, as well as the new camera and 5G features. Furthermore, Huawei, Apple’s main competitor in the premium market, faced declining sales due to the ongoing US sanctions.

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Apple’s Revenue in China

China is a very important market for Apple, despite the fact that the company’s Greater China sales dropped to a five-year low in 2019. After entering the Chinese smartphone market in 2010, Apple’s sales in the region grew more than 20-fold within five years, peaking at $58.7 billion in 2015. According to Statista, China accounted for 25% of Apple’s revenue in 2015. However, the COVID-19 pandemic has affected Apple’s business in China in two major ways, affecting both the demand and the supply side.

Read Also:  Apple Watch will get important health features

On the supply side, Apple says that the production ramp-up after reopening iPhone manufacturing facilities following Chinese New Year is going slower than expected, resulting in worldwide iPhone supply constraints. On the demand side, the illness’ adverse effect on Apple’s bottom line will likely be significant, albeit more limited geographically. All of the company’s retail stores across the country were at least temporarily closed due to the virus, and those that have reopened are seeing very limited customer traffic, hence sales.

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Apple’s Record Profit in China

Despite the challenges posed by the pandemic, Apple’s latest record holiday quarter came in part because of excitement for the iPhone 13 in China, where homegrown Huawei has seen a decline in its market share following U.S. sanctions. Greater China revenue rose 21% to a record $25.8 billion during the quarter ending in December 2021, outpacing its overall revenue growth of 11% to $124 billion, its slowest year-over-year rise in more than a year. Apple’s market share in China has now reached 22% in Q4 2022, according to Counterpoint Research. Apple was the only brand to witness a positive YoY growth in the market in 2020, and it has continued to gain market share in China despite the declining smartphone market.

Final Words

Apple’s iPhone market share and profit in China have been on the rise in recent years, with the iPhone getting its highest-ever market share of 23% in 2022. The new iPhone 13 has led the success due to a relatively lower starting price at its release in China, as well as the new camera and 5G features. Despite the challenges posed by the COVID-19 pandemic, Apple’s revenue in China has remained significant, and its latest record profit in China came in part because of excitement for the iPhone 13. Apple’s market share in China has now reached 22% in Q4 2022, and it has continued to gain market share in China despite the declining smartphone market.

Considering the huge rivalry in China, we must applaud Apple’s desire to make money out of China. From the latest reports, while other brands sell the numbers, Apple claims all the profits. Chinese brands in the U.S. can not make up to 10% of the profits. This is mostly because the only brand that has the capacity to do that has been banned by the U.S. govt.

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