Apple Loses Market Share in China’s Smartphone Segment
Teradata, Apple, and Rackspace Dragged SKYY Last Week
Xiaomi and Huawei trump Apple in smartphone sales
According to a research report from Canalys, Apple (AAPL) has lost market share in the Chinese smartphone segment. Apple’s stock price declined by 2% on August 4, 2015.
Another report from Counterpoint Research stated that Apple now has 12.2% of market share behind Xiaomi (15.8%) and Huawei (15.4%). In 1Q15, Apple led with a market share of 17.80%.
iPhone and China: Significant to Apple’s growth
Although Apple (AAPL) has a variety of products and services sold across the globe, analysts mainly look at the iPhone sales numbers and the situation in China to value performance of the stock. Apple’s market share has increased greatly, not from its secondary products but due to the stupendous growth of its iPhone sales. So, investors and analysts are concerned about the volatile situation in Chinese markets coupled with a decline in iPhone sales that might have an overall impact on the performance of Apple.
However, analysts are of the view that investors should not be too concerned with Apple and its iPhone performance in China in the long run. The firm is a well-established luxury brand globally as well as in China.
Apple for the affluent
According to a 2014 Hurun Research Institute report, Apple was the top luxury brand option for gifts among the affluent in China, overtaking other luxury brands such as Cartier, Louis Vuitton, and Hermès. In comparison, Xiaomi and Huawei are Android-based phones sold at a solid discount, and they cannot be compared with Apple.
Apple is expected to retain its premium appeal, and customers in China are expected to line up in huge numbers at the launch of new products such as the iPhone 6s and others. So, investors should be concerned about Apple’s performance only if the iPhone 6s is unable to boost the firm’s market share in 4Q15.
In addition to Apple, semiconductor firms like Skyworks (SWKS) and Qualcomm (QCOM) also have a high exposure to Chinese markets.
Apple Inc. (AAPL) constitutes 2.63% of the First Trust ISE Cloud Computing Index ETF (SKYY) and 18.08% of the Technology Select Sector SPDR ETF (XLK).
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