iPhone Sales Slow in China

I assume that information came from your daughter. She is probably better informed than I, also, if I’m not mistaken she resides in Beijing while I spend most of my time in Gunagxi in the southeast.

While the trade war began while I was still in China, so far as I was aware there was no associated PR campaign related to American products, but that there is one does not surprise me. Both Xi Jinping and Li Keqiang are held in very high regard in China (despite some misgivings about Xi’s revision to the constitution allowing for more than two terms in office). Like everything else in China, change comes rapidly but unevenly. In other words, what is now a shared attitude about US product status in the north may not have reached the south . . . yet. When I left Guilin (Dec 5) iPhones, Nike, Starbucks, etc. were still held in high regard. No one I knew (both young and old) had any misgivings about openly displaying/using US branded products.

What was obvious is that the Chinese were actively pursuing other sources for agricultural products. Soybean purchases have largely shifted to South American and Russian (surprise) exporters. Same goes for garbanzo beans and other lesser publicized farm products. My guess is that those shifts in procurement will be long-lasting if not permanent. Even as the trade tensions ease, there will be little motivation for the Chinese to return to American suppliers despite our more highly developed delivery infrastructure. Exactly what this means for American Midwestern farmers is maybe hard to predict at this time, but I’ve read that 2018 farm bankruptcies have reached a high not seen in decades.

In brighter news, I read today that the Chinese service sector showed strong growth at least in part offsetting the contraction in the manufacturing sector.


The Chinese are staying away from the iPhone because they can find buy similar products from Xiaomi, Huawei, Oppo, Vivo, Sugar etc for a fraction of the price.

The really affluent are still buying the iPhone but the vast majority are not, and this is not due to an anti-American stance.

Plenty of other American brands are still doing fine here (Nike, Starbucks, McDonalds etc)

Agree with this having seen the iPhone and Smart phone market evolve in China and Asia. I would say the Apple’s issues in China and more broadly are:

  1. iPhone and smart phone saturation 2) Apple over-pricing their iPhones 3) with 5G round the corner who wants to spend $1000 on a 4G phone that is about to be obsolete 4) Trade tensions 5) Qualcomm court order upheld blocking some iPhone models being sold

Generally given that China and Asia is extremely tech oriented, I see the China numbers being a harbinger for numbers elsewhere. Throw in the stalling of innovation at Apple, the lack of penetration of the Apple Pay wallet and the poor penetration of the Apple home speaker/control assistant, honestly - apart from amazing margins and the growth (and stickiness) in services revenues; I don’t see a lot going for Apple.

If Apple’s innovation has basically reached the level of removing earphone jacks and introducing air pods then they’re done for. Xiaomi and Huawei have far more innovations all of the time as well as the ability to fast follow Apple and Samsung.