(9to5) iPhone sales in China fell twice as fast as the smartphone market as a wh

iPhone sales in China fell twice as fast as the smartphone market as a whole – IDC

Apple revealed in its holiday quarter earnings call that it was poor iPhone sales in China that led it to miss its original guidance so dramatically.
IDC has now estimated the scale of the problem in China, suggesting that iPhone sales fell at twice the rate of the smartphone market as a whole …







The company estimates that while the average fall in smartphone shipments in China was 9.7%, iPhone shipments dropped by almost 20%, reports the South China Morning Post.
Apple reported a 19.9 per cent decline in shipments in China in the fourth quarter, but climbed one place to No 4 in smartphone shipments after Xiaomi did even worse, tumbling 34.9 per cent during the same period, according to a report by research firm IDC published on Monday. Overall industry shipments for China fell 9.7 per cent to 103 million units.
IDC and analysts alike suggest that Apple failed to appreciate the problem with pushing iPhone prices ever higher at a time when the Chinese market was contracting.
Analysts said [CEO Tim Cook] may have glossed over strategic missteps in the world’s largest smartphone market and the effects of fierce competition from fast-improving Chinese Android handset makers.
Cupertino, California-based Apple’s latest iPhone models, which are mostly priced above US$1,000, face a tough challenge from Chinese-brand devices that cost about half or a third less.
“The imbalance between the increasingly severe domestic market environment and Apple’s high product unit price has led to the declines of iPhone shipments in Chinese market,” IDC said in the Chinese-language research report shared on its official WeChat account.
Bloomberg reports Canalys taking the same view.
“Apple doesn’t have a good go-to market strategy that fits the rapidly changing Chinese market,” said Nicole Peng, a senior director at Canalys. “It also seemed to be slow in reacting to China’s economic slowdown and changes in consumption structure” […]
“When smartphones became a commodity for Chinese customers, multinationals need to adjust their overall sales and marketing strategies,” Peng said. “Apple didn’t seem to change its Chinese marketing plans.”
While Xiaomi fared even worse than Apple, SCMP said that the company has responded.
Xiaomi announced that its budget product line Redmi will operate as an independent brand to sharpen its competitive edge.
While Apple sells a number of older models at lower prices than its flagships, there is a reluctance in China to be seen to be owning older gadgets. Some have suggested that an iPhone SE 2 would be one solution, one that Apple previously seems to have rejected, but the poor holiday quarter results have led to speculation that the company may have to rethink the decision. We saw a new concept videojust yesterday.
Some former Apple execs have even postulated that Apple iPhone sales in China can only be revived by creating a China-specific iPhone model.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:

  • AVYA -10.6%

Other news:

  • SNN -5% (NuVasive said to be in talks to be acquired by Smith & Nephew (SNN), according to the FT)
  • BCS -1.2% (reports some investors want Board shakeup at Barclays)
  • MTCH -1% (prices upsized offering $350 mln of 5.625% senior notes due 2029)

Analyst comments:

  • CVLT -3.6% (downgraded to Neutral from Overweight at Piper Jaffray)
  • BBBY -3.2% (downgraded to Sell from Hold at Loop Capital)
  • ARMK -2.4% (downgraded to Neutral at Goldman; removed from Conviction Buy List)
  • GT -1.8% (downgraded to Underperform from Neutral at Longbow)
  • AYX -1.6% (downgraded to Neutral from Outperform at Wedbush)
  • NVDA -1.3% (target lowered to $200 from $244 at Citigroup, replaced as Top Pick; downgraded to Mkt Perform from Outperform at Bernstein)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:

  • NGL +6.3%, NSP +6%, QSR +2.1%, CCJ +0.9%, DO +0.8%

Other news:

  • CAMT +17.3% (announces that Chroma Ate will acquire an approximately 20.5% stake for $9.50/share)
  • NUVA +16.9% (NuVasive said to be in talks to be acquired by Smith & Nephew (SNN), according to the FT)
  • AOBC +3.7% (releases shareholder requested report on product safety measures and monitoring of industry trends)
  • EGY +2.9% (announces 76% increase in proved reserves at year-end 2018)
  • PYX +2.6% (continued strenght)
  • VALE +1.7% (provides various updates on dam disaster; co hires expert panel to assist in investigation)

Analyst comments:

  • PRTO +15.1% (upgraded to Mkt Outperform from Mkt Perform at JMP Securities; tgt $9)
  • CAR +6.5% (upgraded to Buy from Sell at Goldman)
  • CSIQ +4% (upgraded to Neutral from Sell at UBS)
  • EA +3.1% (upgraded to Buy from Neutral at BofA/Merrill)
  • TSLA +2.3% (upgraded to Buy from Hold at Canaccord Genuity)
  • ADI +1.4% (upgraded to Buy from Neutral at BofA/Merrill)
  • HAS +0.7% (upgraded to Buy at Monness Crespi & Hardt)

>>> US Early premarket gappers

Early premarket gappers

Gapping up:

  • NUVA +15%, GRPN +6.4%, AKS +6.2%, CAR +6.2%, AMRN +4.1%, CHK +3.8%, TOL +3.2%, COUP +2.9%, TKC +2.8%, VALE +2.6%, TSLA +2.5%, EA +2.2%, CSIQ +2%, AEG +1.8%, YNDX +1.7%, PYX +1.6%, SHOP +1.6%, ALK +1.5%, JD +1.4%, TEVA +1.4%, HSIC +1.4%, DB +1.3%, CRM +1.3%, UAA +1.2%, MOMO +1.2%, CYBR +1.2%, CNHI +1%, ING +1%, VIPS +0.9%, ERIC +0.8%, GE +0.6%

Gapping down:

  • SNN -6.4%, OSTK -4.1%, GFI -3.9%, AU -2.7%, HMY -2.3%, GT -2%, RBS -1.8%, SGMO -1.6%, GSK -1.5%, GOLD -1.4%, DRD -1.3%, EDU -1.3%, NVDA -1.3%, GDX -1.1%, BCS -1.1%, MT -1%, GLD -0.5%

>>> Pre-Market Indicationsa

  • Deutsche Post (DPW TH) +2.6%
    • Deutsche Post to Delay Postage Price Increase to Summer: FAZ
  • Tomra Systems (TMR TH) +2.5%
  • WPP (0WP TH) +2.2%
  • TUI (TUI1 TH) +2.1%
  • Rio Tinto (RIO1 TH) +1.9%
    • Iron Ore in China Soars as Top Buyer Catches Up With Vale Crisis
  • Grenke (GLJ TH) +1.8%
  • Vodafone (VODI TH) +1.7%
  • Commerzbank (CBK TH) +1.6%
  • Siltronic (WAF TH) +1.5%
  • Wirecard (WDI TH) +1.5%
  • Roche (RHO TH) -0.8%
  • Pandora (3P7 TH) -2%