Report: iPhone sales in China surged 225% in the second quarter

According to the latest research data, Apple became the fastest growing smartphone manufacturer in the Chinese market in the second quarter, effectively resisting the pressure of the global economic downturn in the second quarter. Apple has lower-priced iPhone SE and popular iPhone 11, and higher discounts for consumers, which have helped the company boost its performance in this important market. According to market research firm Counterpoint Research, Apple's channel sales in China from April to June were 7.4 million units, a year-on-year increase of 32%.

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Channel sales refer to the number of iPhones sold to Apple's retail partners, which is closer to the actual sales to consumers.

In comparison, Huawei's channel sales in the quarter were 36.6 million units, a year-on-year increase of 14%. However, Apple's total sales in China are far lower than Huawei's.

OPPO, vivo and Xiaomi also ranked among the top five in the Chinese market, but the sales of these three companies fell sharply, and the entire Chinese market shrank by 17% in the quarter.

In addition, data from Shanghai CINNO Research shows that iPhone sales in the second quarter of the year reached 13 million units in China, a year-on-year increase of 62%. The agency counts retail sales rather than channel sales. On a quarter-on-quarter basis, iPhone sales in the quarter increased by 225% compared with the first quarter. Although it benefited from a low base, it also highlighted the company's strong recovery in the Chinese market.

Apple sold less than 500,000 iPhones in China in February this year, but has since recovered steadily driven by the iPhone 11.

"iPhone 11 remains the best-selling model in China, and has remained so since September last year, which shows Apple's strong brand appeal among Chinese consumers," said Flora Tang, an analyst at Counterpoint Research.

Apple is set to release its financial results for the April-June period on Thursday.

Apple also offered deep discounts on iPhones in June, boosting sales. The inexpensive second-generation iPhone SE was among the top three best-selling phones in China in the second quarter.

Apple also showed great resilience in the service sector. According to Sensor Tower data, App Store gross revenue in the second quarter was $4.4 billion, a 4% decrease from $4.6 billion in the first quarter, but still a 13% year-on-year increase.

"China's App Store spending typically grows in the first and second quarters of each year, but this year's month-on-month decline is mainly due to the normalization of the ecosystem after the peak of the COVID-19 pandemic," said Stephanie Chan.

iPhone 12 is getting a lot of attention

China launched its 5G network in December last year, and local smartphone manufacturers have also launched 5G devices. According to data from Counterpoint Research, one-third of smartphones sold in the Chinese market currently support 5G technology, ranking first in the world.

But Apple has not launched a 5G iPhone. However, several analysts believe that the new device, which may be named iPhone 12, may support 5G.

"If Apple formulates an attractive pricing policy, we expect the 5G iPhone to be immediately popular in China. Chinese consumers are fully aware of the benefits of 5G, and operators are also promoting competitively priced 5G packages," said Flora Tang, an analyst at Counterpoint Research.

Daniel Ives, an analyst at Wedbush Securities, said in a report released on Monday that Apple's "demand in China continued to recover in June and the first half of July, although the pace was somewhat uneven. This fall, iPhone 12 will usher in a huge pent-up demand release cycle in this key market and globally."

He predicts that 60 million to 70 million iPhones in China will be "in the upgrade window over the next year, when Apple will actively promote them at all price points (including iPhone SE and iPhone 12) to consolidate its existing position in the face of competitive pressure from local competitors."