Apple Is Bouncing Back in China Thanks to the iPhone SE

iPhone SE Credit: Apple
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It’s been a real rollercoaster ride for Apple in China over the past couple of years, with Apple not only having to fight the U.S. China trade war last year, but also seeing iPhone sales fall to incredible lows, only to bounce back in unexpected ways.

In fact, it was only a year and a half ago that Apple had a massive iPhone problem in China, partly due to a weakening economy, but also triggered by low demand for Apple’s premium iPhone models in that country. It was enough to trigger the company’s first quarterly revenue forecast downgrade in two decades and led to suggestions that Apple might need to create a new iPhone model just for China, and even rumours of “China Red” iPhone XS and iPhone XS Max models.

While these particular speculations never really amounted to much, one thing Apple did do was drop prices in China on its then-flagship iPhones in an effort to boost sales, since the key problem that Apple seemed to face in that country — one that was shared by Samsung and other premium smartphone makers — was that its products were simply too expensive. Of course, a massive Apple boycott due to the U.S. trade war didn’t help things either, and saw many customers flocking to Huawei both out of a sense of nationalism and of course the more palatable mid-tier prices.

In the end, however, it was the iPhone 11 that actually turned things around for Apple’s Chinese iPhone sales. While the iPhone XR had also been a runaway success, dominating global smartphone sales for all of 2019, it didn’t fare nearly as well in China by comparison, perhaps because many status-conscious Chinese consumers saw it as a second-tier model. By comparison, when the iPhone 11 lineup was released, Apple adjusted the branding to make it much clearer that the standard iPhone 11 was the baseline model, placing the more versions at a more premium tier.

Another Comeback

However, just as the iPhone 11 began boosting Apple’s sales in China, the novel coronavirus pandemic hit, forcing Apple to close all of its retail stores in that country, which resulted in a massive hit in iPhone sales as well, which continued to plummet even as stores slowly began reopening their doors to the public.

At the time, however, many believed that this was just a bump in the road — that consumers were delaying their purchases rather than abandoning the idea of a new iPhone outright, but according to recent data from Counterpoint Research, Apple’s iPhone sales in China appear to be bouncing back even better than before, and it’s due not only to the continuing popularity of the iPhone 11, but also Apple’s new secret weapon: The iPhone SE.

According to the data, the iPhone was the fastest-growing smartphone brand overall in China last quarter, which saw Apple sell about 7.4 million units from April to June — a 32 percent increase from the same quarter back in 2019, and while Apple’s chief rival in China, Huawei, still sold more units overall at 36.6 million, that represented only a 14% increase over last year.

What’s even more interesting, however, is that Apple and Huawei were the only brands that actually saw increases in China this past quarter, with decline sales from other companies actually bringing sales down by 17% in the overall market. This is actually similar to what we’ve been seeing for most of this year in the global smartphone market — Apple gaining a lot of ground at the expense of most of the Android smartphone makers.

According to the Counterpoint Data, the iPhone SE contributed strongly to Apple’s overall sales in China, but it still remains in second place behind the iPhone 11, which is continuing to enjoy overwhelming popularity in China and around the world.

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