China is Making Apple’s Bad Week Worse

 
on December 06 2012 11:38 AM
China GDP
Growth of China’s gross domestic product dipped to 7.5 percent in the second quarter from 7.7% percent in the first quarter this year, according to the National Bureau of Statistics of China. Reuters

There’s more bad news for Apple (NASDAQ:AAPL) to follow up on Wednesday’s announcement of a Nokia (NYSE:NOK) and China Mobile (NYSE:CHL) marriage. According to a fresh report from IDC, Apple’s position in China’s rapidly growing smartphone market is down No. 6 as local brands start taking charge.

What Does China’s Smartphone Market Look Like for Apple?

Apple’s China market share by shipments was under 10 percent in the third quarter, in the same three-month period that the country’s overall shipments hit a record high at more than 60 million units, Reuters said. In the second quarter, Apple was in the fourth spot. Samsung and Lenovo came in at one and two, respectively, the same as in the last quarter. Chinese brand Coolpad jumped three spots to take the third position, while ZTE dropped one place to No.4 and Huawei Technologies was No.5, IDC said. The research firm did not give the market share numbers of any company except Apple, Reuters said.

Our 20-page proprietary analysis of Apple’s stock is ready. Click here and to get your Cheat Sheet report now!

“Chinese vendors Coolpad, Lenovo, and ZTE made it to the Asia Pacific ex-Japan top 5 vendors on strong performance in their home market, showing that it is not impossible for Chinese vendors to surpass international vendors,” IDC’s Wong Teck-zhung said in a statement.

The research firm did not have all bad news for Apple, though.

IDC said it expected a rebound for the company with the launch of the iPhone 5 in the country in December.

Why is China so Important?

China now has more than one billion mobile phone subscribers, and the country is one its way to becoming the world’s largest smartphone market this year. It contributed $23.8 billion, or 15 percent, to Apple’s 2012 fiscal year revenue, which was up 78 percent from the previous year, and the potential for growth is just huge.

CHEAT SHEET Analysis: Catalysts for a Stock’s Movement

One of the core components of our CHEAT SHEET investing framework focuses on the developments that may have a negative or positive influence on a company’s stock. Thursday’s report comes a day after Apple’s shares fell more than 6 percent for its biggest single-day loss in four years.

One of the main worries for investors is that its rivals are becoming increasingly important. The news of the Nokia-China Mobile partnership didn’t help, as the world’s largest carrier by subscribers will give the Finnish company a chance to win back some of its lost share in the country.

Copyright Wall St Cheat Street All rights reserved.

Share this article