On March 9, Bloomberg reported Apple experienced a 60 percent decline in device shipments in Asia last month. The firm’s previously robust Sino sales fell because of the novel coronavirus outbreak, which prompted a temporary closure of its local stores and manufacturing facilities. However, multiple market analysts believe the corporation will experience a significant sales resurgence in the region later this year.
Apple’s Chinese Sales Drop Off
The World Health Organization states medical professionals first reported cases of the COVID-19 disease in Wuhan, China, in late December. The Chinese government attempted to clamp down on the outbreak by initiating wide-ranging travel restrictions and quarantines. As a result, Apple temporarily halted its manufacturing and retail operations in the nation earlier this year.
The China Academy of Information and Communications Technology reported Chinese mobile device shipments fell by 56 percent to 6.4 million handsets in February. Using the organization’s data, Bloomberg determined Apple’s iPhone shipments fell by 495,600 units year-over-year. Recently, the Big Tech firm’s production capacity and distribution facilities have gradually begun reopening.
On March 3, Foxconn, Apple’s Chinese iPhone assembler, said it would resume normal output by the end of the month. Moreover, the company has reopened 38 of the 42 retail locations it has in the region. Nevertheless, Bloomberg predicts the corporation’s fiscal second-quarter Sino sales drop off will lower its annual revenue by $5.1 billion to $5.6 billion.
Conversely, other market analysts assert resurgent Chinese handset sales will mitigate Apple’s recent losses in the second half of 2020.
Apple’s Predicted Chinese iPhone Sales Recovery
Wabash analyst Dan Ives referred to Apple’s February Chinese iPhone sales as experiencing a “doomsday type” decline. However, the market watcher also predicts the corporation will sell 70 million handsets in the region this year. Ives attributed his optimistic forecast to Sino consumer enthusiasm for the firm’s forthcoming 5G-enabled smartphones.
Similarly, Will Wong, an analyst with research firm IDC forecast a recovery for China’s smartphone market in the second half of 2020.
Last November, China’s state-owned wireless carriers began deploying their fifth-generation mobile data networks in earnest. As a result, 50 Sino cities, including Beijing, Shanghai, and Shenzhen, now have 5G service. Moreover, SDX Central notes the nation’s telecommunications companies will provide coverage for 110 million residents in 2020.
Last year, Apple lost ground in the Chinese market to domestic manufacturers like Huawei. But the firm reclaimed some market share with the November 2019 release of the iPhone 11. Indeed, the conglomerate experienced an 18.7 percent increase in handset shipments in December.
Nevertheless, Apple’s Chinese device sales may have hit a wall because they don’t yet offer a fifth-generation compatible product. But the corporation will reportedly release three different 5G iPhones later this year.
Notably, brokerage firm Jeffries conducted a survey revealing 17 percent of Sino smartphone users own an iPhone. However, the study also stated more than 21 percent of local consumers want to buy a new Apple flagship. With multiple 5G offerings coming in the holiday quarter, that 21 percent may make the jump.
Furthermore, it’s worth noting while Apple isn’t a dominant player in the Chinese mobile device sector, it is a big moneymaker. According to IDC, the Cupertino, California-based corporation is the fifth bestselling handset manufacturer in the region. But its high-end pricing makes it the nation’s second-largest smartphone seller in terms of dollar value.