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Apple’s market share in China falls for first time

Apple's Chinese market share and shipment volume fell for the first time last year, according to market data from IDC.

For 2016, Apple experienced year-on-year decline in China with the tech giant's shipments volume to China falling from 58.4 million units in 2015 to 44.9 million in 2016.

Meanwhile, its market share dropped 4 percentage points to 9.6 percent, even as the Chinese smartphone market grew 9 percent for the full year, according to the latest IDC Quarterly Mobile Phone Tracker.

Apple's iPhone turned 10 in January 2017
Apple's iPhone turned 10 in January 2017

At the same time, Chinese smartphone vendors saw their market share rise, with the share belonging to the top four Chinese vendors going from 46 percent in 2015 to 57 percent in 2016.

The leading vendors were OPPO, Huawei and vivo. OPPO has grown very quickly; in 2015 it sold 50 million smartphones, breaking into the top 10 smartphone brands worldwide. This year it sold 78.4 million units in the China market, topping Huawei's 76.6 million. OPPO and vivo mainly target a younger audience, according to the IDC report.

"Increased dependence on mobile apps has led to consumers to seek phone upgrades, thus helping drive the large growth in 2016 Q4," said Tay Xiaohan, senior market analyst with IDC Asia/Pacific's Client Devices team.

"In lower-tiered cities, there was a similar demand by consumers, which OPPO and Vivo met by aggressively pushing mid-range smartphones in these cities."

Oppo

Last week, Apple released its earnings results from the first fiscal quarter which ended on December 31. The company posted record quarterly revenue of $78.4 billion. Also, the data showed Apple generated $16.2 billion in the Greater China segment in the quarter, compared to $18.37 billion in the first quarter of 2016. This is a year-on-year drop of 12 percent.

"Greater China net sales decreased during the first quarter of 2017 compared to the same quarter in 2016 due primarily to lower net sales of iPhone and the effect of weakness in foreign currencies relative to the U.S. dollar," the company said in its quarterly report.

CNBC contacted Apple for comment on the IDC report, but the company has yet to respond.

According to the IDC report, the reason for Apple's market share decline in 2016 was that many consumers were holding for the new iPhone to be released this year. The report predicts the 10-year anniversary iPhone will convert some Android users in China to the iPhone.

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