Slow Android Sales Hint iPhone XR Will Be a Hit in China

The iPhone XR may just be a key opportunity for Apple to gain marketshare in China, according to renowned analyst Ming-Chi Kuo.

In a new TF Securities research note published this week, Kuo wrote that smartphone shipments from major Chinese brands — like Huawei, Oppo, Vivo and Xiaomi — have declined 10 percent year-over-year during China’s Golden Week.

The four firms shipped a cumulative 6.5 to 7 million devices during China’s Golden Week, a national holiday and busy shopping week that kicked off on Oct. 1. All in all, Kuo said Huawei was the only “major winner” with a year-over-year increase in shipments.

Based on the performance during Golden Week, Kuo is forecasting an overall 10 to 15 percent decline in Chinese phone shipments this year.

In other to see further growth in the future, he said that Chinese brands will need to further rely on oversees markets. Of all the China-based manufacturers, Kuo has the most confidence about Huawei — which he says has the “best competitiveness” in those markets.

Kuo named a number of factors for the decline in Chinese OEM growth.

For one, the analyst said that recent Chinese OEM flagships have lacked “innovative feeling points.” While triple-lens cameras and under-display fingerprint sensors are winning features, he noted that it’s currently uncommon to see both features on current flagships.

He added that consumer confidence — and as a result, the replacement cycle — may be impacted by the brewing trade war between the U.S. and China.

Last, but not least, Kuo says many consumers in China will opt for various iPhone models (especially existing iPhone owners). While many of those customers are gravitating toward older Apple handsets, others will wait for the upcoming iPhone XR.

Overall, Kuo expects iPhone XR replacement demand to be much better than the demand for last year’s iPhone 8 and iPhone 8 Plus.

While Apple has seen increasingly stiff competition from local OEMs like Huawei and Xiaomi in China, the iPhone XR may just be a golden opportunity for the Cupertino tech giant to bump up its market share and revenue in the critical Greater China region — which is the largest smartphone market in the world.

The iPhone XR sports many of Apple’s latest flagship smartphone features, like advanced facial recognition and an incredibly fast processor. But, importantly, it retails for a lower starting price of $749.

While it makes a few tradeoffs compared to its OLED stalemate, the iPhone XR seems particularly well-suited to the Chinese market. It’s a larger device with a 6.1-inch display and dual-SIM capabilities, two features which are basically expected of any flagship in China.

In other words, it may be just what Apple needs in the region.

Preorders for the iPhone XR kick off on Friday, Oct. 19. The device will ship out to consumers and stores the following Friday, Oct. 26.