Apple is still struggling to sell iPhones in the world's hottest markets

Apple is still struggling to sell iPhones in the world's hottest markets

access_time2018-09-12 09:28:24

Apple is gearing up for a revamp of its iPhone lineup, but it'll need to do a lot more to catch its rivals in some of the world's hottest smartphone markets.

The company's signature device has failed to gain a strong foothold in countries like China and India, as well as other markets in Asia, where most of the growth in smartphone sales is coming from.

"If we are just looking at the Western markets then they are all mature, everyone has a smartphone," Kiranjeet Kaur, an analyst at research firm IDC, told CNNMoney. People in developed markets are also waiting longer to upgrade their phones, she added.

By contrast, Asia offers huge potential. Hundreds of millions of people in the region have never bought a smartphone, but so far Apple has largely missed out on the opportunity.

The iPhone accounts for only 2% of smartphone sales in India and between 8% and 10% in China — the world's two biggest markets — according to industry estimates. It also has a small share of other Asian markets with huge potential, accounting for 5% of sales in Vietnam, 8% in Thailand and just 1% in Indonesia in the past year, according to IDC.

In addition to its perennial rival, South Korea's Samsung (SSNLF ), Apple is facing tougher competition from Chinese players such as Huawei, Oppo, Vivo and Xiaomi.


All four have surged ahead of Apple (AAPL ) in China and now control more than 80% of that market, according to research firm Canalys. Huawei overtook Apple as the world's second biggest smartphone brand  — behind Samsung — earlier this year.

 

The trade war could make life even harder for Apple in China, where overall smartphone shipments suffered their biggest decline ever  in the first quarter of 2018.

Prices are already Apple's biggest challenge in India, where around 800 million people have yet to experience the internet, and most of them will likely do so through smartphones.

The country is one of the world's most expensive places to buy Apple devices, with increased tariffs  pushing the price of an iPhone X to $1,700  earlier this year.

That puts it out of reach of most Indians, who earn less than $2,000 a year on an average.

Apple last year began manufacturing some lower-end devices at a plant in Bangalore to avoid hefty import duties, but its top models like the iPhone X and the iPhone 8 are still shipped in from overseas.

CNNMoney


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