In the early morning of January 28, Apple released its fiscal first quarter ended December 25, 2021. According to the financial report, Apple's total revenue in the quarter was $123.9 billion, an increase of 11% year-on-year, a record high. From the perspective of regional revenue, the revenue of Greater China reached a year-on-year increase of 21%, which has become one of the key drivers of Apple's revenue growth.
In the latest data released by a number of research institutions, Apple set the best sales record since entering the Chinese market in the fourth quarter of last year. In the fourth quarter of 2021, one out of every four phones sold in china's smartphone market was Apple, and the last time this happened was six years ago.
Canalys analyst Toby Zhu said that in the context of tight global supply, Apple has ensured sufficient supply in the Chinese market, and in the fourth quarter of the overall retail market, it unexpectedly lowered the listing price of new product series, which greatly stimulated the demand for replacement machines.
Affected by the positive earnings report, Apple shares rose about 5% in after-hours trading.
Apple's market share in China hit a record high
According to the financial report data, Apple's fist business iPhone revenue reached $71.6 billion in the quarter, an increase of 9% year-on-year, and the proportion of business was further increased to 58%.
In a post-meeting conference call, Apple CEO Tim Cook said that the performance of the entire iPhone 13 series exceeded market expectations.
In the Chinese market, according to the data released by a number of institutions on the 28th, Apple set the best single-quarter sales performance in the Chinese market.
"Apple's share of the Chinese market has reached its historical peak since entering China in 2009, accounting for a quarter of the total market shipments. In the fourth quarter of the overall retail market decline, Apple unexpectedly lowered the listing price of new product series, which greatly stimulated the demand for replacement machines. At the same time, the absence of strong competitors in the high-end market also contributed to Apple's record-breaking performance this quarter. Canalys analyst Toby Zhu said that apple's iPhone 13 series shipments reached 21.5 million units in the fourth quarter of 2021, regaining the first laurel since the first quarter of 2015.
Mengmeng Zhang, a research analyst at Counterpoint Research, said: "Apple's performance is driven by its pricing strategy, but also benefits from the market share of some of the original Huawei's high-end models. After the release of the iPhone 13 in September (week 39), Apple ranked first in the Chinese market. Since then, it has been in the lead for much of the fourth quarter. The hot sales of the new iPhone 13 are mainly due to the release of relatively low starting prices in China, as well as new cameras and 5G features. In addition, due to the continued sanctions by the United States, Apple's main competitor in the high-end market, Huawei, is facing a decline in sales. ”
Wang Xi, IDC China research manager, said that in 2021, Apple's total shipments in the domestic market have exceeded 50 million units again since 2015, and the annual growth rate is also the highest among the top five manufacturers.
It is worth noting that in the latest quarter, Apple's net profit reached $34.6 billion, an increase of 20.4% year-on-year, and the increase in mobile phone sales undoubtedly played an important role.
China's demand for mobile phones is shrinking but remains the world's largest high-end market
In 2021, the Chinese mainland smartphone market has experienced a year of ups and downs.
Canalys said that after the aggressive first quarter of shipments, manufacturers in the second and third quarters have adjusted the pace of listing. In the fourth quarter, the year-end answer sheet was delivered at a year-on-year growth rate of 3%, with 86.6 million units shipped and more than 333 million units shipped in the whole year, up slightly by 1% year-on-year, but the market still shrank by more than 10% compared with the pre-epidemic 2019 market.
"The main growth bottleneck in the Chinese market is on the demand side." Nicole Peng, vice president of mobile business at Canalys, said that in the environment of chip shortage, China, as the world's largest smartphone market, has no doubt about the supply priority of manufacturers. The challenge for manufacturers is how to achieve breakthrough innovation in both hardware technology and experience in the mature category of smart phones, so as to accelerate the mid-to-high-end user replacement cycle.
Counterpoint Research mentioned in the report that in the fourth quarter of 2021, China's smartphone sales fell by 9% year-on-year.
"Due to various factors on both the supply and demand sides, the Chinese market continues to decline." Ivan Lam, a senior analyst at Counterpoint Research, said that first, the continued shortage of parts is affecting shipments of all mobile phone manufacturers. Second, the average replacement cycle of smartphones in China is getting longer and longer. Smartphone designs of mobile phone brands have also become more homogeneous, especially in terms of hardware, failing to stimulate consumers' desire to upgrade their mobile phones. Finally, China is experiencing a complex economic environment dominated by export growth, while domestic consumption remains lackluster.
Although it is difficult to see more than 400 million units shipped annually before 2018, the shipment value and ASP in the Chinese market have maintained a steady increase despite the shock of the large market volume.
Canalys predicts that the Chinese market will remain the world's largest high-end market in 2022, contributing 30% of the world's product shipments of more than 500 US dollars, which means that the competition around the high-end market is still fierce this year.
Canalys analyst Amber Liu said that in 2021, Android manufacturers have made additional iterations of their high-end production lines, such as OPPO Find X3, Xiaomi 12, vivo X70, honor Magic 3. In addition, the folding screen has become a new track for Android manufacturers to compete with Apple, and there are also differences in the pursuit of folding screen experience by various manufacturers, helping manufacturers attract the attention of high-end early adopters.
But in 2021, folding screen products account for about 0.5% of the domestic smart phone market, still a niche product form, for challenging Apple's existing position, for Android manufacturers, only rely on folding screen products is not enough.
"So far, the impact of each (manufacturer) on the high-end is still relatively difficult, and in the long run, the future will definitely change." Some domestic mobile phone manufacturers told reporters that the successful breakthrough of high-end brands is not in how wide and deep the moat is dug, but depends on whether it can maintain the positive reputation of users in the constant changes in the market, in addition, there is a lag effect between the input and output of the technology itself, with the collective breakthrough of domestic mobile phones in technology, the high-end market will gradually open.