iPhone demand in China is on the rise again

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iPhone XS Max
2019 has seen a real turnaround for iPhone in China.
Photo: Leander Kahney/Cult of Mac

The drop in iPhone sales among Chinese consumers that hurt Apple so much last year is now a thing of the past, according to market analysts. The company saw five straight months of growth in that important region.

The iPhone lost market share in China each month between October 2018 and December 2018, according to an analyst at Morgan Stanley. This helped contribute to Apple’s poor performance that quarter.

But the company’s installed base in China increased every month since then. In a note to clients, analyst Katy Huberty called this a “constructive data point when juxtaposed against weak China demand environment last year and investor fears of a dramatic drop-off in near-term iPhone demand in China.”

Huberty credits the turnaround to “iPhone price cuts, greater usage of financing vehicles, lower VAT taxes and Chinese consumer confidence that is up ~10 points from last summer (per the National Bureau of Statistics of China).”

The big picture of 2019 iPhone sales

While improved sales in China are certainly positive news for Apple, the turnaround reportedly began in Q1 2019 but Apple still saw a year-over-year drop in iPhone revenue that quarter. This is because the company is also experiencing iPhone sales slowdowns in other regions.

Morgan Stanley’s Huberty predicts a year-over-year iPhone sales decline during the current quarter of 10 percent, and an 8 percent decline next quarter.

Via: AppleInsider