Apple beaten by Huawei in China smartphone survey

Customers queue outside the Apple store in Beijing ahead of doors opening for the launch of the iPhone 8 © Bloomberg

Huawei has for the first time beaten Apple to the top spot for what smartphone buyers in China are intending to purchase, according to a survey of 1,000 consumers.

The finding forms part of research conducted after the launch of the iPhone 8 by FT Confidential Research, an investment research group owned by the FT. 

The result adds to doubts about global demand for the iPhone 8, as well as reflecting the strong competition Apple faces in China from domestic rivals, such as Huawei, Oppo and Vivo.

Although weaker demand for the iPhone 8 has been blamed on Apple fans waiting for the feature-laden iPhone X, the FTCR data take into account expected orders for that new phone. In China, Apple's new models as a whole are underperforming previous launches, according to the research.

Of those planning to buy an iPhone, 65.1 per cent of respondents said they intended to buy an iPhone 8, 8 Plus or X, compared with the 75.7 per cent who said they planned to buy one of the two iPhone 7 models when they were launched last year.

Overall, the proportion of people saying they would buy an iPhone as their next phone dropped to 24.2 per cent in September, compared with 25.8 per cent at the time of the iPhone 7 launch in 2016 and 31.4 per cent in 2015. Huawei was the top choice, with more than 31.4 per cent of respondents opting for this brand.

Apple's decline in relative popularity in China is partly because market growth is becoming concentrated in mid-range phones that cost Rmb2,000-Rmb2,999 ($300-$450) rather than the more expensive end where Apple aims its models, according to FTCR data on consumer budgets. Costing Rmb8388 in China, the iPhone X is Apple's priciest handset yet.

But analysts also suggest the iPhone 8 is not as attractive to local tastes.

"Chinese consumers are particular about having phones that stand out and look different from previous versions. That is something perhaps that's lacking for the iPhone 8," said Xiaohan Tay, smartphone analyst at market research firm IDC.

Xie Pu, a technology columnist based in Changsha, said: "This [iPhone 8] model doesn't have that striking quality that makes users' eyes light up."

Apple declined to comment.

China's phone sellers, who buy in bulk and resell when Apple Stores run out, also give some indication of demand. Street sellers outside the Apple Store in a central shopping area of Beijing said they were reselling the iPhone 8 for Rmb700 above the official price, whereas they were able to resell the iPhone 7 for Rmb2,000-Rmb3,000 above official prices after last year's launch. 

Meanwhile, the share prices of iPhone casing supplier Catcher Technology and assembler Pegatron have dropped by 18 per cent and 14 per cent respectively since the iPhone 8 was launched. 

Largely because many customers are waiting for the launch of the iPhone X, which is expected in November, analysts at Yuanta forecast manufacturers will ship 49m of the 8 and 8 Plus in 2017, compared with 80m of the two iPhone 7 models shipped in 2016. 

Source: Apple beaten by Huawei in China smartphone survey