Shares of Apple (NYSE:AAPL) have dropped considerably since July 20, from US$132 to close at just over US$114 on August 4. This week’s down trend was accentuated by evidence that China’s Xiaomi and Huawei have dethroned Apple from the top sales spot in the Chinese smart phone market for the second quarter.
Xiaomi occupied the top spot for the period from April to June, with 15.9% of market share according to research firm Canalys, while Huawei was in a very close second spot with 15.7% of the Chinese market.
Apple, Samsung and Vivo, also Chinese, follow, Canalys said, without providing their respective market shares. Apple, however, dominated smartphone sales in China in the first quarter and investors are baffled by the fact that the Cupertino company launched its iPhone 6 and 6 Plus models, the wider screen intended to seduce Asian buyers.
Indeed, sales of Apple’s iPhone have actually surged 85% in the second quarter in China, Taiwan and Hong Kong, gaining market share. Its performance is not crumbling; on the contrary, its iPhone sales jumped 85% in the second quarter in mainland China, Taiwan and Hong Kong, doubling regional revenues to reach US$13 billion.
"We are extremely optimistic about China….We would be crazy to change our plans" increased investment, said Apple boss Tim Cook, citing "an incredible and unprecedented level of opportunities," said Apple boss, Tim Cook.
But, for all its success, Xiaomi’s is greater, especially considering the company was only established in 2010. The Chinese phone maker offers high-end and feature-rich devices – at much lower prices than those of its rivals. Having enjoyed a meteoric rise, it is now the world’s third largest phone maker behind Apple and Samsung.
Therefore, Apple’s performance in China is less a problem of its phones not selling and more of one where the competition has proven to be more resilient than expected. This morning, Apple was trading 0.72% higher.