Apple iPhone Hits Brick Wall In China As Oppo Snatches Top Sales Slot

Apple has been criticized for not innovating as much as it could have with its iPhone 7, a handset that critics feel is an uninspired upgrade over previous iPhone models. If Apple is unwilling to listen to the critics, it may want to pay attention to the sales figures and market share reports, which seem to be saying the same thing. Over in China, Oppo is now the top dog while demand for the iPhone was "lower than expected."

The latest figures from Counterpoint's Market Monitor service show that smartphone demand in China is still robust and growing. Smartphone shipments in the fourth quarter rose 12 percent annually in China, and 9 percent sequentially. Counterpoint described the landscape as a "competitive and crowded environment" that leads to frequent shifts among the top players, though there were some clear winners and losers.

iPhone 7 Plus

For the full year, Oppo was the biggest victor with a staggering 109 percent growth in smartphone shipments. It was one of five brands to record healthy growth over the course of the full year, the others being Huawei, vivo, Meizu, and Gionee. Collectively those five smartphone players accounted for more than half of the total Chinese smartphone market in all of 2016. Every other brand saw a decline.

As for Apple, sales of its iPhones dropped 21 percent for the full year. That's not as much as Coolpad and Lenovo, which saw declines of 44 percent and 79 percent, respectively, but it was significantly more than ZTE (down 10 percent) and Samsung (down 5 percent).

"Demand for rest of the brands declined, especially last year’s star performers Xiaomi and Apple with lower-than-expectd demand for their smartphones during the year," Counterpoint said.

Apple can take solace in its iPhone 6S model being the second best selling smartphone model in China last year. The market research firm also noted "healthy demand for the newer flagship iPhone 7 series in Q4 2016," but at the same time said Apple "remains in a vulnerable position." It also faces higher expectations for its next iPhone model, even though it has not been announced yet.

The sky is not exactly falling for Apple, though clearly it needs to rethink its iPhone strategy. Apple recently posted its first annual sales decline in 15 years on lower than expected demand for iPhones, followed by Tim Cook missing out on $1.5 million in salary for failing to hit performance goals.