Since Apple announced that it would stop reporting the iPhone unit sales number during Q3 earnings call, things have not become easier.
iPhone Ban in China
The fight between Qualcomm and Apple has led to a sales ban on older iPhone models in China, ordered from a Chinese court (福州市中级人民法院). The case was filed against Apple in China in late 2017, saying the iPhone maker infringed patents on features related to resizing photographs and managing apps on a touch screen.
Apple said it planned a software update that would solve the issue; also, the ban would likely take time to enforce, according to Reuters.
iPhone Ban in German
In German, Apple will be pulling iPhone 7 and iPhone 8 models from its stores there following a win for Qualcomm in the District Court of Munich, which ruled that Apple’s devices were infringing on Qualcomm’s intellectual property related to power savings in smartphones. (The Verge)
Qualcomm said on Thursday (Jan.3) that it posted security bonds of 1.34 billion euros ($1.52 billion) to enforce the German court order.
Apple Outlook Cut Citing Weaker iPhone Demands in China
On Jan 2, a letter from Apple CEO Tim Cook to investors said sales will be about $84 billion in the quarter ended Dec. 29, down from earlier estimates of $89 billion to $93 billion. Apple posted sales of $88.3 billion in the fiscal first quarter a year earlier, so the new forecast would mean Apple is reporting a holiday quarter slowdown for the first time since Cook became CEO in 2011. (Bloomberg)
Apple shares fell 10% to $142.19, the biggest drop in almost six years, the next day.
In the letter, Cook said Apple’s gross margin will be approximately 38%. (also discussed in a previous post about Apple’s pricing strategy)
Chinese Phone Makers Gaining In Zero-growth Market
Although 2018 Q4 numbers are not yet available, Q3 numbers tell the same story. According to IDC Quarterly Mobile Phone Tracker on Nov 1.
| Company | 3Q18 Shipment Volumes (millions) | 3Q18 Market Share | 3Q17 Shipment Volumes (millions) | 3Q17 Market Share | 3Q18/3Q17 Change |
| Samsung | 72.2 | 20.3% | 83.3 | 22.1% | -13.4% |
| Huawei | 52.0 | 14.6% | 39.1 | 10.4% | 32.9% |
| Apple | 46.9 | 13.2% | 46.7 | 12.4% | 0.5% |
| Xiaomi | 34.3 | 9.7% | 28.3 | 7.5% | 21.2% |
| OPPO | 29.9 | 8.4% | 30.6 | 8.1% | -2.1% |
| Others | 119.9 | 33.8% | 149.8 | 39.6% | -19.9% |
| Total | 355.2 | 100.0% | 377.8 | 100.0% | -6.0% |
And in Gartner’s December report…
| Vendor | 3Q18 Units (thousands) | 3Q18 Market Share (%) | 3Q17 Units (thousands) | 3Q17 Market Share (%) |
| Samsung | 73,360.1 | 18.9 | 85,605.3 | 22.3 |
| Huawei | 52,218.4 | 13.4 | 36,501.8 | 9.5 |
| Apple | 45,746.6 | 11.8 | 45,441.9 | 11.8 |
| Xiaomi | 33,219.7 | 8.5 | 26,853.2 | 7.0 |
| OPPO | 30,563.4 | 7.9 | 29,449.2 | 7.7 |
| Others | 153,960.0 | 39.6 | 159,742.0 | 41.6 |
| Total | 389,068.2 | 100.0 | 383,593.4 | 100.0 |
What is good for Apple…
From Cook’s letter, we know Apple’s wearables sales grew by almost 50% year-over-year, as Apple Watch and AirPods were wildly popular among holiday shoppers.