Apple reported better than expected iPhone sales, but units were still down 15%. This drop was driven primarily by weakness in China, where sales were down 33%. But the Chinese smartphone market isn’t shrinking, instead cheaper competitors like OPPO and Vivo have started offering competitive products at half the price of an iPhone - a value proposition that is catching on with consumers.
More concerning to Apple, these Chinese OEMs are beginning to reach beyond their own borders and into Western markets in search of growth. If the idea of a half priced premium smartphone catches on with Western consumers, Apple’s China problem could spill over globally to become an existential crisis for the company. It feels like deja vu from the PC era, where Apple revolutionized the home computer only to lose out to the Windows ecosystem. This time it’s Android playing spoiler.
Apple’s loss could be Qualcomm’s gain. If you look at the AP powering the higher end Chinese smartphones, you will often find a Snapdragon. As Chinese OEMs invade western markets, Qualcomm could see a reinvigoration in sales.
More concerning to Apple, these Chinese OEMs are beginning to reach beyond their own borders and into Western markets in search of growth. If the idea of a half priced premium smartphone catches on with Western consumers, Apple’s China problem could spill over globally to become an existential crisis for the company. It feels like deja vu from the PC era, where Apple revolutionized the home computer only to lose out to the Windows ecosystem. This time it’s Android playing spoiler.
Apple’s loss could be Qualcomm’s gain. If you look at the AP powering the higher end Chinese smartphones, you will often find a Snapdragon. As Chinese OEMs invade western markets, Qualcomm could see a reinvigoration in sales.