Threat from Ascendant Chinese Phones Hangs over Apple

Galaxy Note 9 and iPhone XS primary cameras

Galaxy Note 9 and iPhone XS primary cameras

The rationale behind Apple not reporting unit sales of iPhone seems to be the shift in business. Mid-priced phone firms from China, such as Xiaomi, are providing Apple with stiff competition, especially in growing markets overseas, such as India, Russia, and Brazil. At the end of third quarter, IDC claims Apple had a market share of 13.2 percent, registering a modest growth of 0.5 percent over same period previous year.

For Q1 of 2018, Xiaomi took 30.3 percent of the smartphone market in India, and for Q2, it took 29.2.

Amongst the three Chinese smartphone companies, Xiaomi is rising quickly.

"This is the case where it's much different in other parts of the world", said Ryan Reith, program vice president for IDC's mobile device tracking program, noting that most US consumers are not familiar with Xiaomi, Oppo and Vivo phones.

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At the fiscal four quarter earnings call early this month, Apple announced that it will stop sharing unit sales of iPhones starting next quarter. And iPhone suppliers Lumentum Holdings (LITE) and Japan Display (6740.Japan) also lowered their financial forecasts on Monday, prompting a selloff in the stocks of Apple and its suppliers. She predicts that the services segment, which includes the App Store, Apple Music, and Apple Pay, will grow to 25% of the company's sales and 36% of profits by fiscal 2022, versus 15% of revenue and 21% of profits today.

There are still no official cases for the iPhone XR, Apple is just selling a couple of OtterBox cases.

In the US, Chinese phones are relatively still unknown, with the exception of OnePlus, whose 6T model is comparable to new iPhone models. The OnePlus 6T is now being sold at T-Mobile stores in the United States, for US$549 (S$ 755), and according to the general manager for North America for OnePlus Kyle Kiang, first-day sales for this year were 86 percent higher than the previous model.

But Chinese smartphone makers have been packing their phones with higher-end chips and features like under-the-glass fingerprint sensors that seek to attract consumers who might otherwise give Apple's phones a look. He said sales were higher because of the T-Mobile relationship.

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