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Sales of Apple’s iPhone line of smartphones declined for the first time ever last quarter and everyone has been down on Apple ever since, from the media and investors and even to many end users. What’s more, iPhone 7 leaks have suggested that Apple’s upcoming new smartphones for 2016 will feature a design that’s largely the same as the company’s current iPhone models. Apple’s situation certainly isn’t as dark as some are making them out to be, but there’s little question that things are trending downward right now — and May’s mobile market share data offers even more gloomy data to that effect.
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Net Applications tracks monthly platform usage to put its market share data together each month, and it has always followed sales trends very closely. Unlike most market share data published by market research firms, this data is based on actual device usage statistics as opposed to end user device sales or channel sales.
So how does May’s data look for Apple? Not good. Not good at all.
As you can see from the chart above, Apple’s share of the smartphone and tablet market declined significantly in May to 23.10%. That’s big drop from 28.42% in April, and iOS’s share was nearly 32% in March. At the same time, Android’s share of the market skyrocketed to a record high 70.85% in May, up from 61.92% in the prior month.
Also of note, Windows Phone dropped to 2.57% after spiking to more than 4% in April. Meanwhile, BlackBerry’s market share sank to under 1% for the first time ever.
“We expect 2018 to be another tough year for Apple iPhone in China, as the overall smartphone market is slowing, compounding the already harsh conditions of reduced carrier subsidies and fierce local hardware competition,” says Neil Mawston, executive director for wireless devices with market research firm Strategy Analytics.
More on Forbes: Huawei's Smartphone Market Share Is Growing Fast, But It Needs To Break The U.S. Market, And Soon
“If Apple wants to grow iPhone volume higher in China in the future, it will have to push down, not up, the pricing curve, to target more mid-range consumers who can no longer afford a full-fat iPhone because of diminished carrier subsidies,” he says.
Slowing sales
Chinese consumers overall are buying fewer smartphones, market research firm Canalys said in January. Shipments in China, the world’s biggest smartphone market, fell 4% in 2017 year on year to 459 million devices. Market research firm IDC estimates a drop last year of 4.9% and expects another 2% loss this year.
Consumers in China found changes to handset technology “minor” in 2017, IDC says in a statement February 6. Most had finished in 2016 replacing smartphones for models with hotter features such as larger screens, fingerprint readers and new camera features, IDC research manager Kiranjeet Kaur says. High prices also limit Apple’s sales, he added.
Carrier subsidies
An ongoing erosion of carrier subsidies in China may further hurt Apple, effectively raising iPhone prices in the country.
The Chinese government has asked domestic telecom providers to cut marketing costs by 20%, according to this report by investment research website Market Realist, and that cut would cover smartphone subsidies. Hits to smartphone subsidies “affect Apple the most, as it depends highly on subsidies to grow its iPhone sales,” the report says.
Cuts in subsidies for iPhone sales evidently began in 2014, applying to major carriers China Mobile, China Telecom and China Unicom, state-run China Daily online reported.
Local competitors
Apple’s price of up to $1,200 per iPhone X will daunt Chinese consumers, analysts believe. A lot of shoppers still watch their budgets despite a trend of rising wealth. Domestic Android-based brands know this. Lower prices have helped lift their market shares over the past half-decade in China as well as other emerging markets.
“For example, Huawei has deepened its presence in China over the years and its actions have paid back quite nicely,” says Eddie Han, industry analyst with Taipei-based Market Intelligence & Consulting Institute. “It will likely continue consolidating its share in the Chinese market as its efforts to crack the U.S. smartphone market via U.S. telecom operators are still in vain.”
Chinese customers buy the new iPhone X at the Apple store in Beijing on November 3, 2017. (FRED DUFOUR/AFP/Getty Images)
Apple’s flurry of new iPhones in late 2017 has increased its market share in China, where consumers with a lot of locally-made alternatives traditionally see the Silicon Valley brand as a status symbol. Apple's market share reached 24.3% by year’s end, per this report, up from October, apparently driven by the iPhone 8, 8 Plus and X. Apple took a record 51% of global smartphone market share in the final quarter of the year, according to data here.
But Apple's impressive China share is due to drop over the coming year, analysts believe. Chinese Android-based smartphone brands from companies like Huawei and Xiaomi will take back some of the market by selling for less, they say. Chinese mobile carriers are also cutting subsidies for handset vendors as the overall smartphone market slows down on declining interest in new devices overall, industry analysts believe.
“We expect 2018 to be another tough year for Apple iPhone in China, as the overall smartphone market is slowing, compounding the already harsh conditions of reduced carrier subsidies and fierce local hardware competition,” says Neil Mawston, executive director for wireless devices with market research firm Strategy Analytics.
More on Forbes: Huawei's Smartphone Market Share Is Growing Fast, But It Needs To Break The U.S. Market, And Soon
“If Apple wants to grow iPhone volume higher in China in the future, it will have to push down, not up, the pricing curve, to target more mid-range consumers who can no longer afford a full-fat iPhone because of diminished carrier subsidies,” he says.
Slowing sales
Chinese consumers overall are buying fewer smartphones, market research firm Canalys said in January. Shipments in China, the world’s biggest smartphone market, fell 4% in 2017 year on year to 459 million devices. Market research firm IDC estimates a drop last year of 4.9% and expects another 2% loss this year.
Consumers in China found changes to handset technology “minor” in 2017, IDC says in a statement February 6. Most had finished in 2016 replacing smartphones for models with hotter features such as larger screens, fingerprint readers and new camera features, IDC research manager Kiranjeet Kaur says. High prices also limit Apple’s sales, he added.
Carrier subsidies
An ongoing erosion of carrier subsidies in China may further hurt Apple, effectively raising iPhone prices in the country.
The Chinese government has asked domestic telecom providers to cut marketing costs by 20%, according to this report by investment research website Market Realist, and that cut would cover smartphone subsidies. Hits to smartphone subsidies “affect Apple the most, as it depends highly on subsidies to grow its iPhone sales,” the report says.
Cuts in subsidies for iPhone sales evidently began in 2014, applying to major carriers China Mobile, China Telecom and China Unicom, state-run China Daily online reported.
Local competitors
Apple’s price of up to $1,200 per iPhone X will daunt Chinese consumers, analysts believe. A lot of shoppers still watch their budgets despite a trend of rising wealth. Domestic Android-based brands know this. Lower prices have helped lift their market shares over the past half-decade in China as well as other emerging markets.
“For example, Huawei has deepened its presence in China over the years and its actions have paid back quite nicely,” says Eddie Han, industry analyst with Taipei-based Market Intelligence & Consulting Institute. “It will likely continue consolidating its share in the Chinese market as its efforts to crack the U.S. smartphone market via U.S. telecom operators are still in vain.”
1mobile Market For Ios
A dancer with traditional costume takes a photograph with her smartphone as she waits to perform at a fair to celebrate the Lunar New Year, marking the Year of the Dog, in Beijing on February 17, 2018. (NICOLAS ASFOURI/AFP/Getty Images)
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Chinese brands Oppo and Vivo have “done a great job” in selling to second-tier and third-tier cities, while Xiaomi “vows to regain its reign” in China, Han adds.
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In the fourth quarter last year, four Chinese brands led market shares in their homeland, IDC says. At the top, Huawei claimed 24.3% and Oppo took 20%. The other two were Vivo and Xiaomi.