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Apple reclaims top smartphone spot in China

Apple has reclaimed the top smartphone seller spot in China for the first time in six years as biting US sanctions throttled shipments from rival Huawei.

The California company cornered 23 per cent of the world’s largest phone market in the fourth quarter of 2021, according to research group Counterpoint, which noted it was Apple’s highest ever market share in the country.

While Apple’s smartphone shipments in China were up 32 per cent to 50m units from a year earlier, Huawei saw its sales collapse 73 per cent, according to Counterpoint.

Apple has gone to great lengths to placate Beijing amid fierce geopolitical tensions with Washington and has so far avoided falling foul of China’s vociferous army of online nationalists, who have taken aim at other western companies including Intel, Walmart, H&M and Adidas.

Chief executive Tim Cook has been adept at navigating the concerns of Chinese leaders helping to boost the US company’s growth.

Total China smartphone sales were down 9 per cent year on year in the three-month period, with local brand Vivo the second best seller, the data showed.

Chinese national champion Huawei has been unable to get chips for its premium smartphones for more than a year due to US export controls intended to deny the company access to essential technology and component supplies.

Washington’s sanctions have forced Huawei to sell its budget brand Honor to a government-backed consortium and retool its business away from smartphones, which had once been a key pillar for the company.

Huawei’s revenues last year fell to an estimated Rmb634bn ($100bn), down 29 per cent from 2020.

“China’s high-end smartphone market was dominated by Huawei for years . . . [and] with Huawei out, Apple doesn’t have a competitor in the segment,” said Counterpoint analyst Ivan Lam.

Lam noted other Chinese brands such as Xiaomi, Oppo and Vivo were less successful at breaking into the premium market last year.

Apple’s fourth-quarter sales bump came on the back of the launch of its more affordable iPhone 13 model. Lam noted Apple has also been more willing to work with Chinese ecommerce sites that add their own discounts to lure customers.

China is an increasingly important market for the US group. In the year to September 25, Apple brought in 19 per cent of its revenue from greater China, which includes the mainland, Hong Kong and Taiwan. Sales were up 70 per cent over the prior year and operating income in China almost doubled to $29bn.

Apple has set up a data centre with a state-owned partner to store Chinese user data. The US group regularly pulls apps at the government’s request and blocks potentially problematic products from running in the country, such as Apple News.

Apple has also gradually brought more mainland Chinese companies into its supply chain and its top manufacturer Taiwanese company Foxconn employs tens of thousands of workers in the country.

Nian Liu contributed research

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