China has surged ahead of the U.S in terms of iPhone sales for Apple Inc. (NASDAQ:AAPL), according to Bloomberg’s, Yvonne Man. It marks the first time that the Cupertino-based company has sold more devices in China than on its home turf, a clear indication of a shift in the power balance in the fast growing smartphone arena.
“This report coming out from the Financial Times they were citing several analysts one from UBS, which forecasted that for the first quarter, China, 36% of shipments went to that country. Compare that to 22% a year ago; compare that to the U.S. 24% headed to that country in the home turf there for the quarter,” said Mrs. Man.
The increase in shipments in the communist country has been attributed to the signing of an agreement between Apple Inc. (NASDAQ:AAPL) and China’s largest network operator China Mobile in 2013. The network reportedly has more subscribers than Verizon Communications Inc. (NYSE:VZ), AT&T Inc. (NYSE:T) and Sprint Corp (NYSE:S) combined an advantage that seem to have been passed down to Apple in terms of coverage.
Increased shipments in China should be good news for Apple Inc. (NASDAQ:AAPL) considering iPhones account for nearly half of the company’s total sales. The turning point to Apple’s increased product sales in China has also been attributed to the sale of iPhone 6 and iPhone 6 plus that have enjoyed record demand levels in Asia’s largest marketplace.
The milestone breakthrough comes on the heels of CEO, Tim Cook, back in 2013 reiterating that China was in line to surpass the U.S as Apple Inc. (NASDAQ:AAPL)’s largest source of revenue. Creative Strategies analyst, Ben Bajarian, states that 2 million more iPhones might have been sold in China than in the U.S with iWatch expected to further cement brand loyalty in the country.
Going Forward, Apple will need to pay a closer watch to headwinds especially in China in terms of regulations and stiff competition from Xiaomi
“You’ve got new competition and you have run-ins with the government. Obviously, with the release of the iPhone they were actually delayed by a month because of this protracted regulatory review process, also you are going to see a lot more about Xiaomi. You’ve got those smartphone makers that are a little more popular than Apple so-so far because they are much cheaper, in terms of marketing, in terms of designs. Very similar to Apple as well,” said Mrs. Man
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