A new research note from Counterpoint shows that whilst Apple’s dominance in China is not as high as its peak, it is the only foreign smartphone brand that matters in the region. iPhone 7 Plus was the no.2 best selling handset across all of 2017, and the smaller iPhone 7 took fifth place (via CNBC).
China’s propensity towards larger-screened phones is shown by the Plus’ popularity compared to the regular iPhone 7. Apple was the only foreign brand to feature in the top 10 phone models, with 5.2% total market share from both iPhone 7 models.
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The 2.8% market share of the 7 Plus was only beaten by the Oppo R9 which took the top spot with 3% share of overall sales. Apple may have some of the top-selling models but its local competitors – like Oppo, Huawei, and Vivo – find success selling many more models overall.
Apple is currently the fourth best-selling phone company in China. However, reception to iPhone 8 and iPhone X has seemingly been strong and Apple may bump a couple more places when fourth-quarter studies are published.
The iPhone 7 series was the first time Apple really differentiated the Plus from the entry-level model outside of screen size, heavily marketing the exclusive 2x optical zoom and Portrait mode features, which were only available on the Plus because it was the only model to feature a dual camera system.
In earnings calls at the start of the year, Apple said it was surprised by the strong customer response to iPhone 7 Plus relative to iPhone 7. Whilst globally the cheaper iPhone 7 model outsold the Plus, the 5.5-inch model represented a larger portion of the mix than in the iPhone 6 or iPhone 6s cycles.
It remains to be seen whether that trend will continue into the 2017-2018 period. Customers with bigger budgets may opt for iPhone X more than the Plus, for example. Investors and analysts still aren’t entirely clear on how the iPhone 8, iPhone 8 Plus and iPhone X will perform relative to each other.
Apple will report its holiday quarter results in an earnings call on February 1st. The company is predicting record revenue guidance, which implies more than 80 million iPhones and >100 million iOS devices total sold in the three months from October to December.
The success of iPhone 7 Plus shows that Chinese customers are willing to pay a premium for Apple’s hardware despite the market flooded with much cheaper competition. This again bodes well for iPhone X sales in China with its fashionable, modern design, larger OLED display and other attractive features coming at a hefty price.