While low demand in the global market of mobile phones, especially in major markets such as China, the United States and Japan, has contributed to the spread of pessimism in the intelligent market, the real challenge for Chinese mobile operators may not lie at the demand level, but at the profit rate. Although the current market for mobile phones appears to be a patchwork, with brands such as apples, three stars, OPPOs, VIVO and rice, for consumers, the trend of apples, three stars is further enhanced.
Counterpoint data show that, in the first quarter of 2023, three stars and apples delivered 600,000 and 58 million respectively, with a combined market share of 43 per cent. At the profit level, apples and three constellations together accounted for 96 per cent of the operating profits of the global intelligent mobile market, of which apples accounted for 84 per cent and three constellations for 12 per cent. Other brands account for 4 per cent of profits.
In the context of the market as a whole, the challenges facing Chinese mobile brands will be greater than those of apples. Despite the fact that OPPO takes the first place in the market share from the Chinese intelligent mobile market, the difficult situation in China’s branding of smart mobile phones cannot be reversed in the absence of an uncertain recovery in the consumption of the Chinese market.
Difficulties
The Chinese market, as a major global consumer market, has a critical role in business performance. In addition to the three-star mobile phones after the blast doors, the Chinese market is gradually marginalized, whether by apples or by Chinese brands with the Chinese market as the main capital, or even by the upstream of the associated industrial chain, with particular attention to the recovery of the Chinese market.
In the first quarter, signals of the revival of China’s intelligent mobile market have not yet emerged. The first quarter of China’s intelligent cellular market statistics released by IDC show that the intelligent handicraft market continues to show low performance, with China’s intelligent handicraft market offerings of about 65.44 million in the first quarter, down by 11.8 per cent. The report of TechInsight shows that the Chinese market has seen double-digit decline in five consecutive quarters. At the same time, both agencies indicated good performance after the second quarter of the Chinese market. According to the analysis, the Chinese market is coming to a bottom line, with breakthroughs at the supply end and demand-end markets, and the Chinese market is expected to return in the second quarter.
However, upstream suppliers are relatively pessimistic. In his previous financial statements, the Highton CEO, Cristiiano Amon, stated that the changing macroeconomic context had led to further deterioration of demand, especially in the case of mobile phones, with a range (demand decline) exceeding our previous projections.” Until there are signs of recovery, it will remain cautious. In particular, with regard to the recovery of the Chinese market, CEO stated that “we have not seen any meaningful signs of recovery and have not included improvements in our planning assumptions”.
What can be done?
The downturn in the Chinese market and the global market embarrassment of a handicraft, have not yet emerged. Despite a degree of decline in the receipt of apples resulting from the collapse of the flat and Macbook operations, iPhone sales performance was unexpected and even recorded. The second fiscal year of apples showed that the iPhone battalion received $51.334 million, an increase of 2 per cent over the market forecast of $488.4 billion.
The view was expressed that iPhone’s “sustaining” in the marketing market benefited mainly from the upgrading of the adhesiveness of apples’ mobile phone users in its ecological beauty. Despite the global intelligent market demand, iPhone is still being pursued by consumers, especially young consumers, in the western market. On the other hand, in the market of China, the market share that has been vacated by sanctions has become iPhone in the Chinese market.
However, the decline in market demand in China continues to inevitably affect the receipt of apples in the greater Republic of China sector, with the apples in the second fiscal quarter of China receiving $172 million, a decline of 3 per cent compared to the same period last year of $184.3 million. In fact, the apples believe that the increase in iPhone’s marketing is largely due to the 15 per cent growth achieved in the Asia-Pacific region, including India, which partly compensates for the downturn in the Greater China region.
In fact, in recent years, apples have been seeking growth opportunities in emerging markets, where apples continue to operate in India’s outposts, contributing to new growth in apples. In contrast, Chinese mobile brands continue to be less dependent on the Chinese market, with the top two remaining three constellations and apples in terms of the share of the global market, followed by brands such as OPPO, Vivo and migrating. This means that the Chinese brand is still inadequate to cultivate overseas markets.
On the other hand, Chinese brands account for only 4 per cent of the global mobile market, which has led to an increase in the internal volume of Chinese mobile brands and the urgent need for national product plates to take up high-end markets. Over the past few years, high-end markets have been hit, and several years have passed, but in the face of apples and three stars, there is still a great room for progress, and this step requires considerable innovative capacity, which will otherwise face a further staple of market shares.
(HEA.CN)