Smartphone sales in China fell 14% in the first quarter, as volumes fell “close to levels seen during the first quarter of the year affected by the severe pandemic,” Thursday report.
Its market share in China is now 17.9%, compared to 21.7% in the quarter ended December.
A report from Canalys on Friday also showed that Apple slipped from the market leader in China to third place, with its first-quarter shipments down 36% from the previous quarter. Canalys tracks manufacturers’ shipments to retail outlets, rather than sales to consumers.
Evan Lam, chief analyst at Counterpoint Research, attributed Apple’s decline in part to The economic slowdown in China “has affected the money in people’s pockets”.
Lam added that local Chinese brands – including Vivo, Honor and Oppo̦ – have fared better than Apple as their sales rebounded after suffering from the strong performance of the iPhone 13 in the last quarter of 2021.
Overall, a seasonal drop in demand and significant economic uncertainty dragged the market into the first few months of this year.
“I don’t think the second-quarter data will improve much, as the ongoing shutdowns will continue to affect consumers’ willingness to spend,” Lam told CNN Business.
The Chinese economy has slowed sharply in the past two months. Retail sales contracted in March for the first time in more than a year. Meanwhile, the unemployment rate jumped to a record 6% in 31 major cities.
“These factors, along with the downward demand trend that had already emerged in the Chinese smartphone market before the new epidemic wave, significantly affected the sector,” said Mengmeng Zhang, research analyst at Counterpoint Research, in the report accompanying the data release.
It expected smartphone demand in China to remain “disappointed” due to weak consumer confidence and a lack of new innovations to motivate consumers.
CEO Tim Cook said Thursday during an earnings call that the increasing restrictions of Covid in China, along with an industry-wide shortage of silicon, will affect the company’s next quarter by $4 billion to $8 billion.
“Supply chain issues remain a headwind in China, and that will impact June quarter growth,” said Dan Ives, analyst at Wedbush Securities.
Earlier this month, Canalys warned that global smartphone sellers face significant uncertainty due to ongoing lockdowns in China, the Russia-Ukraine war, and the threat of inflation.
Samantha Murphy Kelly contributed to this report.