Apple Registers 225% iPhone Sales Growth In Q2 In China, Remains Fastest-Growing Smartphone Maker: Report

Apple Inc. AAPL emerged as the fastest-growing smartphone maker on mainland China in the second quarter this year, as iPhone SE and iPhone 11 models led the company to register robust sales, according to Counterpoint Research data reported by CNBC Tuesday.

What Happened

The Cupertino-based company saw a sell-through volume of 7.4 million units for iPhones in the crucial Asian market in the quarter ended June, a growth of 32% year-on-year.

Numbers from Shanghai-based CINNO Research separately indicate sales of iPhone spiked 62% year-on-year to 13 million units in Q2. This is a 225% increase over the previous quarter, according to CINNO.

The incredible surge in sales can at least partially be attributed to the sudden drop of sales in the first quarter this year in China due to the novel coronavirus (COVID-19) pandemic. Apple managed to increase its market-share in Q1 as well, even as the wider market saw a slump.

Rival Huawei registered sell-through volumes of 36.6 million devices, a 14% rise year-on-year, maintaining its dominance in the country's market.

Oppo, Vivo, and Xiaomi Corporation XIACF, which are among the top five large smartphone brands in China, all saw sales erode with the overall market declining 17% year-on-year.

Why It Matters

Apple offered steep discounts on its latest model smartphones during a major online shopping sales event in June, with participation from the company’s channel partners Alibaba Group Holding Ltd BABA and JD.com Inc JD.

The iPhone maker's recent success on the mainland was also visible in services as the App Store raked in $4.4 billion in gross revenue in the quarter, although this figure marks a 4% decline than the $4.6 billion revenue generated in the first quarter but is higher by 13% year-on-year, according to Sensor Tower, CNBC noted.

Analysts expect the next version of the iPhone — the iPhone 12 — to support the next generation network 5G technology with Wedbush Securities’ Daniel Ives estimating 60-70 million iPhones in China to be in the upgrade window over the next year.

Apple is set to release its official third-quarter earnings on Thursday.

Price Action

Apple shares closed 1.64% lower at $373.01 on Tuesday and rose almost 0.5% in the after-hours trading to $374.75.
Photo by Arnel Hasanovic on Unsplash