After years of only achieving minimal traction in the country, Apple Inc. (NASDAQ:AAPL) finally appears to be making headway in India … a market that sports 1.3 billion consumers who collectively spend $13.9 billion on smartphones, most of which aren't (yet) iPhones. Better still for owners of AAPL stock, India is in the midst of entering its next era of consumerism, with GDP growth rates persistently around 7%. Spending power is on the rise for a wide swath of its population, two-thirds of which are under the age of 35. That's Apple's prime demographic.
It couldn't be happening at a more fortuitous time either. See, while Apple is doing well enough in North America and Europe, it continues to slip in China … a market once hailed as the company's panacea. Though some onlookers are confident the company can turn things around there too, few can afford to be too hopeful.
Function Over Label at AppleWhile Apple's fiscal second quarter (calendar Q1) report divulged some key details about how the company was faring in China, and elsewhere, it wasn't a complete look at the situation. Namely, the company's quarterly filings don't compare it to other smartphone makers.
IDC has crunched the numbers, however, and they're not great.
Technology market research outfit IDC estimates that Apple's market share slumped from 11% in the fourth quarter of 2016 to only 9.2% in the first quarter of this year. That makes it the country's fourth-biggest player for the all-important smartphone market.
Apple's loss was Huawei's gain. Ditto for Samsung Electronics (OTCMKTS:SSNLF), in China and everywhere else too. After an embarrassing string of exploding Galaxy Note 7's forced the company to recall all of them last year — taking a huge toll on its results and market share — it reclaimed its market share lead during the first quarter of 2017.
Sales in China are a key part of that recovery. Huawei gained global market share in Q1 as well.
The shifting market share has, or at least should have, AAPL stock holders asking questions, not the least of which is what these other manufacturers are doing that's so compelling.
Oppenheimer analyst Andrew Uerkwitz believes he has his finger on the pulse of this shift, explaining after talking with smartphone makers in China and Taiwan:
"There was general consensus among our conversations that confirms our thesis that Apple's dwindling market share in Greater China is due to the lack of compelling differentiation among hardware and software. The mobile user experience in China is heavily dictated by Tencent (OTCMKTS:TCEHY) and other local internet companies, making Apple's software and services ineffective as key differentiators."
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Source: Apple Inc. (AAPL) Stock Can't Rely on Any Real Help From China
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