Apple suffered a "double slip" in China in the third quarter. Who is the culprit?

According to Apple’s third-quarter earnings report, revenues of $42.4 billion were lower than the same period last year, and net profit fell 27% year-on-year. This situation in the mobile phone market is due to the dual competitive pressure from Samsung and Huawei, especially Huawei's continued strong performance in the high-end market. On the other hand, some local brands in China have seized the opportunity of slowing down the mobile phone update cycle in first-tier cities. , quickly occupy a wider population outside the first-line cities.

The light of American Apple is fading. In the past year, it has never been too far to describe the performance of this company with "worry", especially the rapid decline of the Chinese market, which can be a huge blow to Apple.

According to Apple’s latest third-quarter earnings report, its revenue was $42.4 billion, down from $49.6 billion in the same period last year; net profit also fell 27% year-on-year to $7.8 billion.

From the product level, the iPhone, which has accumulated countless radiances for Apple, has performed poorly, which is one of the main reasons for Apple's “double slip”.

In the quarter, the iPhone sold 40.4 million iPhones, down 15% year-on-year; revenue was $24.48 billion, down 23% from $31.368 billion in the same period last year, ranking first among all declines.

Although Apple has not released sales data for specific regions, as the world's largest smartphone market, China's performance is related to Apple's future.

The financial report showed that Greater China revenue was 8.848 billion US dollars, down 33% from the 13.32 billion US dollars in the same period last year; the total revenue was 21%, setting a new low for Apple in the past seven quarters.

If this is not enough, and then compare the data of the regional revenue, you will be surprised to find that the Chinese market has lost the title of Apple's second largest market in the world.

It is understood that in the last quarter, Apple's revenue in China reached 16.8 billion US dollars, and China surpassed Europe to become Apple's second largest market in the world. Today, the slightly declining European market revenue is 9.6 billion US dollars, more than 8.8 billion US dollars in the Chinese market to regain the world's second title.

In the face of the cliff-like decline, what happened to Apple in the Chinese market?

In the report and observation of the mobile phone industry, on the one hand, the competitive pressure from Huawei and Samsung, especially Huawei's continued strong performance in the high-end market; on the other hand, some local brands in China have seized the mobile phone update cycle in the first-tier cities. Slow time, quickly occupy a wider population outside the first-line cities.

Samsung and Huawei's pinch

Like Apple’s falling crisis, Samsung’s mobile phone business has been deteriorating. But from the global sales and share, he is still firmly in the position of the hegemon.

According to IDC's latest report, total global smartphone shipments in the first quarter of this year were 334.9 million units, up only 0.2% year-on-year, the smallest year-on-year increase since records began. However, Samsung still ranked first with 81.9 million units of shipments and 24.6% market share.

From a global perspective, Samsung's blow to Apple is mainly from other markets besides China. In these markets, Apple's iPhone is only the first in the US market, and other markets are behind Android brand manufacturers. This manufacturer is really Samsung.

As the only competitor of Apple in the high-end market, Samsung has been hit hard by the iPhone 6. However, last year Samsung's Galaxy S6 reversed the previous trend of decline with hyperbolic screen technology. This year's Galaxy S7 has a hot market reputation with dual-pixel shooting, IP68 waterproof and Samsung Pay, which are superior to Apple's iPhone.

According to the data provided by the organization, in the US market in the second quarter of this year, Samsung's smartphone market share reached 37%, occupying the top of the US sales rankings, while Apple's iPhone ranked second with 29% market share. This makes Apple a bit embarrassing, and even worse, the upcoming iPhone 7 is still generally seen.

It is understood that Samsung is still ahead of Apple, plans to release a new mobile phone Galaxy Note7 at the beginning of next month, before the Galaxy S7 edge one of the main selling points of the hyperbolic screen will also be introduced into the note series for the first time. Its new features, including the eye-catching iris recognition and IP68 waterproofing, have put a lot of pressure on the iPhone 7.

The iPhone 7 has been used by Samsung and Chinese mobile phone brands because of its dual-lens shooting and wireless charging functions. It is not enough innovation, which brings more anxiety to the apples in the decline.

Back to the Chinese market, Apple's biggest competitor is Huawei, the world's largest communications equipment manufacturer. This brand, from OEM to its own brand, to the high-end mobile phone market of more than 4,000 yuan, step by step. Encroaching on Samsung and Apple users.

Yesterday, Huawei announced its first half of this year's results. Its shipments reached 60.56 million units, up 25% year-on-year; total sales were 77.4 billion yuan, up 41% year-on-year.

Yu Chengdong, CEO of Huawei's consumer business, said, “The increase in revenue significantly exceeds the increase in shipments, indicating that the unit price of Huawei products continues to increase effectively.” This means that domestic brands have really penetrated into the high-end market of Samsung and Apple.

In the half year of 60.56 million smartphone shipments, this data almost caught up with Xiaomi last year. More importantly, Huawei's high-end mobile phone business is growing very fast, with shipments accounting for more than 30% in the first half of the year.

It is understood that Huawei P9 has been listed for three months, sales volume has reached 4.5 million units, and the full sales cycle is expected to exceed 10 million units. This makes Huawei confident that it will surpass Apple and Samsung in the future.

It can be said that starting from the Mate series, Huawei has seized a certain market from Samsung. Next, Huawei hopes that the P series will be able to extract teeth from Apple, and we see this sign from the actual user level.

Pengu Zhizhi's recently released "True" survey report shows that nearly 25% of former iPhone users have now replaced their phones with Huawei phones. On many third-party e-commerce platforms, Huawei's high-quality, cost-effective praise can also be seen from the consumer message, and many users directly expressed that they are willing to share recommended Huawei mobile phones with others after using the products. This shows the impact of Huawei's flagship mobile phone on the iPhone.

At present, the global market share of Huawei's terminal products has climbed from 9.9% at the end of last year to 11.4%, and continues to rank third in the world, behind Samsung Apple. However, in the Chinese market, Yu Chengdong said that Huawei's mobile phone market share is currently 18.6%, ranking first.

Under the internal and external attacks of Huawei and Samsung, Apple's own reasons can not be ignored.

In the past six months, its main sales model iPhone 6s was considered a transitional product by the outside world, and the market sales did not meet expectations, which is evident from the weakness of its upstream supply chain.

According to Dian Optoelectronics, the main OEM Apple camera module, it will be “significantly weak” in the first quarter. The technology that is responsible for the production of iPhone metal casings shows that the performance in the first quarter was flat compared to the same period last year. The situation did not improve until the second quarter.

Secondly, Apple overestimated the willingness of users in the Chinese market. Compared with previous generations of iPhones, Apple is now facing multiple pressures such as innovation bottlenecks, market saturation, increased competition, and prolonged cycles.

"Although Apple's service revenue is growing substantially, it is not enough to support the overall performance. If Apple's strategy has not changed, the decline will continue into the next quarter."

They broke the apple's back road

Smartphones are no longer a luxury, and the increase in user penetration will inevitably lead to a slowdown in market growth.

IDC's data shows that global mobile phone shipment growth will drop to 5.7% this year, compared with 10.4% last year and 27.6% the previous year. This downside is really amazing.

Apple also realized this problem at the beginning of this year. In order to compete with domestic brands and expand users outside the high-end market that is already full, Apple introduced a four-inch "cheap" iPhone SE in the first quarter.

The iPhone SE can indeed satisfy the "Apple Dream" of some Chinese users. Unfortunately, Apple did not give the price of the iPhone SE for the "old bottled old wine".

For the traditional mobile phone brands such as vivo, OPPO, and Gionee, which are firmly controlled in the markets outside the first-tier cities, and the cost-effective products, the iPhone SE is doomed to failure.

This is because it is an indisputable fact that the growth rate of global smartphones is slowing down. However, in the market areas of China's layer by layer, there are still huge purchases and replacement users. The purchase factors they usually consider are decent enough. A cost-effective mobile phone. And spending more than 3,000 yuan, or even 4,000 yuan to buy a 4-inch Apple iPhone SE phone is almost out of their consideration.

As one of the few "evergreen trees" in China's mobile phone brands, OPPO, vivo, Gionee, etc. have always focused on the market price of 2,000 to 3,000 yuan, they cater to these users, while avoiding high-end brands such as Samsung and Huawei, and Xiaomi, LeTV, 360 and other Internet brands are facing low prices.

In design, they are close to the actual needs of users, such as appearance, sound effects, photography, energy consumption and so on. The rapid growth is mainly due to its offline marketing channels. According to incomplete statistics, the number of marketing channels in the two countries has reached nearly 400,000.

Every holiday, you will find that you can see their grand marketing activities in major supermarkets and mobile retail stores. Such as buying mobile phone free film, free pre-installed applications, and even free personalized customization services, these push-type strong marketing methods have envied many mobile phone manufacturers, users here is the real God.

Data shows that in the first quarter of this year, OPPO and Vivo's smartphone shipments exceeded 15 million units. This is only Huawei, ahead of Samsung and Apple.

"Forbes" online version has written that Apple's current challenge in the Chinese market is not from Huawei and Xiaomi, but from OPPO. Although it is somewhat exaggerated, it also shows that these traditional brands have had an impact on high-end brands such as Apple and Samsung. Compared with Huawei, they are attacking from the bottom up.

However, such a "vacuum zone" vivo and OPPO may not be able to enjoy it anymore. According to Yu Chengdong, in the German IFA two months later, Huawei will release a light flagship product at a price of around 2,000 yuan.

At the same time, Huawei also said that it will increase the investment in offline channels. Its strategy is to “give profit” channels and let channel retailers earn money. He said that in 2016, Huawei's key plan is to cover the stores in at least 1,000 counties with an investment amount of 100 million yuan.

If so, a new round of shuffling in the Chinese mobile phone market is coming.