Apple designs and sells consumer electronics, computer software, and personal computers and also operates retail stores. Its best-known hardware products are the Macintosh line of computers, the iPod, the iPad and the iPhone – Apple is the world’s third largest mobile phone-maker after Samsung and Nokia.
Apple smartphones lose ground in China to cheaper domestic brands
Mainland shipments fall as consumers buy cheaper domestic handsets
Apple's share of the mainland's smartphone market was cut by almost half in the second quarter as consumers opted for lower-priced handsets from domestic suppliers such as Xiaomi.
The California-based giant's smartphone shipments in China fell to 5 per cent of the total in the second quarter from 9 per cent a year earlier, Nicole Peng, China research director for Canalys, said yesterday.
That is Apple's lowest market share since the fourth quarter of 2010, according to estimates from Canalys.
Domestic handset vendors are benefiting as carriers such as China Unicom (Hong Kong) promote low-priced smartphones like Lenovo's A66 or ZTE's V790, both priced at 499 yuan (HK$632). Beijing-based Xiaomi's shipments surpassed the iPhone by "a small margin", with the firm moving to sixth place from eighth a year earlier.
"Apple is only focused on the high-end segment, and China's smartphone market growth right now is coming from the mid to low end," Peng said. "Apple doesn't have any products in the mid to low end, and that's where Xiaomi has been building its brand awareness."
The US firm is missing out on the broadest segment of the market, as it has yet to offer a device running the 3G network of China Mobile, the world's largest carrier, with 740 million subscribers. Each of the five biggest vendors on the mainland has an agreement with the operator.
Apple sells the iPhone 5 on its China website from 5,288 yuan. Xiaomi will offer a handset this month priced at 799 yuan.
Kitty Potter, a Beijing-based spokeswoman for Apple, could not be reached for comment.
South Korea's Samsung Electronics led the mainland's smartphone market with an 18 per cent share in the second quarter, followed by Lenovo, with 12 per cent, Peng said.
Rounding out the top five were China Wireless Technologies, ZTE and Huawei Technologies, she said.
Apple chief executive Tim Cook met China Mobile chairman Xi Guohua last month for the second time this year in Beijing to discuss possible co-operation between the companies.
Xiaomi will double handset sales to 15 million this year from 7.2 million last year, founder and chief executive Lei Jun said in June.
Apple will introduce a cheaper version of the iPhone to lure more cost-conscious shoppers, Gene Munster, an analyst at Piper Jaffray, said last month.
Research firm IDC said in a report that Apple's share of the worldwide smartphone market during the second quarter decreased to 13.2 per cent from 16.6 per cent the same quarter a year ago.