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Spending on Smartphones Seen Rising in China, Providing a Boost for Apple

Lanon Wee

Chinese shoppers have, on average, been shelling out more money for smartphones than before, according to the latest figures, which is an advantage to Apple in a significant arena for its costly iPhones. The average cost of handsets in mainland China was $450 last year, and is expected to increase this year, as Canalys noted in its recently released report. Huawei is likely to be Apple's biggest adversary at the high-end of the market in China, a company that was at one time the biggest smartphone vendor globally. Chinese consumers are reportedly spending more money than ever before on smartphones, which is a great sign for U.S. tech giant Apple, a major purveyor of pricier iPhones. According to research firm Canalys, the average price of smartphones sold in mainland China was $450 in 2019 and is predicted to increase this year. Lucas Zhong, a Canalys analyst, commented that the boost in price is thanks to Apple's release of new products, as well as the growing selection of premium devices offered by Chinese vendors. International Data Corporation reported that the average cost of phones sold in China during the first quarter of 2020 was roughly $470, a 5% year-over-year jump. Even though smartphone shipments to China have declined, the high-end market is still flourishing, a favorable situation for Apple, which Canalys reported was alone among the top five vendors to expand shipments during the second quarter. Apple's iOS system and accessories like the Apple Watch are helping it to remain competitive against other Android players, according to Zhong. Huawei, the Chinese brand that was severely affected by U.S. sanctions, is challenging Apple in the premium smartphone market. According to IDC data, the two companies account for a 56% market share for handsets priced between $600 and $800, and a 94% share in the $1,000-$1,600 segment. Huawei returned to the top five smartphone makers in the second quarter, and its launch of the Mate X3 foldable as well as Honor's Magic V2 device and other manufacturers' foldable offerings are a tactic to compete with Apple. Compared to other brands, Apple has strong customer loyalty that will help it stay competitive in the Chinese market, despite not yet having a foldable phone. Will Wong, senior research manager at IDC commented that the cost to leave Apple's ecosystem will be a "key fortress" for the company.

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