iPhone popularity declines in China

During the June quarter, sales were not merely flat -- they plummeted 43%.

By Benzinga Aug 16, 2013 12:55PM
copyright Jacqueline Veissid, Photodisc, Getty ImagesBy Louis Bedigian

Earlier this week it seemed that the next-generation iPhone -- or at the very least its low-cost companion -- would finally inspire  China Mobile (CHL) to sign a deal with Apple (AAPL) (Benzinga). The Chinese telecommunications giant has been reluctant to sell the iPhone for a couple of reasons.

Some analysts have speculated that the high subsidies have turned off China Mobile. Other reports claimed that the company wanted to receive a portion of the revenue Apple derives from the App Store.

Nonetheless, Apple CEO Tim Cook has been meeting with China Mobile executives in an attempt to persuade them. While nothing has been officially announced, the two parties are expected to come to an agreement very soon.

Until then, Apple might have to endure some soft iPhone sales (financialtimes.com) in China. According to market intelligence firm TrendForce, Chinese consumers are losing interest in Apple's flagship device.

AVANTI, TrendForce's market survey company, recently asked Chinese consumers to rate their interest in smartphone manufacturers. The survey also wanted to know about the consumers' smartphone preferences.

AVANTI did not reveal all of the data points, but it found that Apple was "vastly behind" Samsung (SSNLF) in the categories of "most anticipated smartphone purchase" and "most used smartphone brand." Apple is trending downward in both areas.

When it comes to brand recognition, the iPhone maker is still slightly ahead of Samsung, but only by 1%.

The survey also showed that Chinese manufacturers like Lenovo (LNVGY), Huawei and Xiaomi are doing "reasonably well" in China and are "poised for positive growth in the upcoming quarters."

HTC and Nokia (NOK) are not performing nearly as well. The two companies continue to rank very well in the "brand recognition" category (placing just behind Apple and Samsung), but users are losing interest in their products.

Nokia, for example, fell from first to third place in the area of "most used smartphone brand." HTC dropped to fifth place, though the report did not state where the company placed last year.

Among the HTC users who were surveyed, 33.8% revealed that they may purchase a Samsung smartphone at some point in the future.

Since TrendForce chose to publish the survey highlights instead of the full results, diehard Apple fans may dismiss the accuracy of this report. Investors who are long Apple may do the same.

But even if the survey results are inaccurate, there's no denying that Apple is struggling to maintain its growth in China. During the June quarter, sales were not merely flat -- they plummeted 43% (techcrunch).

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

More from Benzinga
Aug 18, 2013 8:50PM

Don't you know that the current I-phone won't work on China Mobiles system??

CM has a G-3 network unique to them that is why they as of yet have no apple phone available.


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