Apple (AAPL) Loses Ground in China to Native Phonemakers: Report

Apple (AAPL) shares closed Monday’s regular trading at $118.44, down $2.86 or 2.36%. However, in after-hours, the share dropped another 0.57% following the tech giant’s loss of its top ranking as China’s largest smartphone vendor.

In the first three months of FY 2015, the iPhone 6 and iPhone 6 Plus helped Apple snag the top spot in China as the biggest seller of smartphones for the first time ever. However, its ranking has now been pushed to third place.

For the second quarter of the year, Chinese mobile company Xiaomi bounced back with an estimated market share of 15.9% to grab the top slot away from Apple. Fellow Chinese vendor Huawei Technologies Co. came in second place with an estimated 15.7% market share, according to data compiled by research firm Canalys. Apple, which had been number one in 4Q’14 and 1Q’15, has fallen to number three. Samsung and Vivo slide in at four and five, respectively.

This action comes as “competition among major brands has never been so intense,” Canalys analyst Jingwen Wang said in a brief press release.”Huawei recorded the highest smartphone shipments in its history without compromising its product margin or profitability. Apple and Samsung have both increased their sales activities in the China market, expanding rapidly in channel coverage through flagship stores and small to medium size phone retailers respectively.”

Canalys’ report does not quote the exact share of the market Apple claimed in third spot. However, a separate market size estimate, released by Counterpoint Research, has the split between the three top rankings as 15.8% for Xiaomi, 15.4% for Huawei and 12.2% for Apple.

While Cupertino has lost its top position for the time being, analysts remain optimistic. The tech giant continues to expand its sales activities on a global level. Recent Strategy Analytics data pointed to Apple becoming the second-biggest cellphone vendor worldwide during the June quarter. Canaccord Genuity recently reported that “Apple takes a full 92% of all the profits made in the entire smartphone industry despite accounting for only 20% of sales.”

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