Apple's China sales surge, bright spot in quarter hurt by supply issues

Apple's China sales surge, bright spot in quarter hurt by supply issues
By Reuters
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SHANGHAI -Apple Inc posted a staggering 83% annual sales growth in China in its fiscal fourth quarter, remaining the phone of choice for big spenders in the world’s second-largest economy after Huawei’s troubles.

That was up sharply from a 28.5% annual rise in sales a year ago, which did not include the sale of Apple’s first 5G enabled smartphone iPhone 12.

The jump also easily outstripped the 29% overall sales growth at Apple, which said on Thursday that production took a drubbing due to the ongoing global chip crisis and supply chain bottlenecks in Southeast Asia.

“Apple’s strong performance with its iPhone was related to Huawei’s decline in the high-end segment,” said Will Wong, an analyst at market research firm IDC. “Other key Chinese vendors still need time to build their high-end image.”

Most of Apple’s competition in China now comes from Chinese phone maker Honor, a brand that Huawei sold earlier this year after it was hit by U.S. sanctions that prevented it from sourcing chips.

Honor mostly sells low-and-mid-range phones, but in August it released its Magic 3 high-end line that sells for as much as 7,999 yuan ($1,251). The cheapest iPhone 13 variant sells for 5,199 yuan.

Honor climbed to number three in terms of market share in the July-September period, according to market research firms Canalys and Counterpoint Research.

Apple took fifth spot, with its market share up at 11% from 6% a year earlier, said Canalys. Counterpoint Research put Apple’s share at 13%.

Chinese budget phonemakers Vivo and Oppo retained first and second spots even as overall smartphone sales in the country fell by 5%-9%, according to the two firms.

The iPhone 13, launched five days before Apple’s fiscal quarter ended on Sept 25., “is doing quite well in October” in China, said Canalys analyst Nicole Peng.

“I believe demand will still surpass supply in the short term, which means some customers might instead purchase their upgrade during Chinese new year sales,” said Peng, referring to the busy February shopping season.

($1 = 6.3905 Chinese yuan)

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