Dropping iPhone Demand in China Shows Growing Buyer Concerns

 

Apple says dropping demand for iPhones in China will cause its overall revenue to fall well below previous predictions.

Apple chief Tim Cook addressed the issue in a letter to company shareholders¹ on Wednesday. Cook warned that the company’s latest revenue guidance would be lowered to $84 billion. That was down from an earlier estimate of $89 to $93 billion.

The news caused Apple stock to trade sharply lower. It also led to big drops overall in the U.S. stock market, as well as other financial markets around the world.

The development was the latest sign of increasing economic concerns among Chinese buyers. The iPhone is Apple’s biggest product. It made up about 60 percent of the company’s revenue in the last quarter reported.

But Apple’s new $1,000 iPhones are a difficult sell to Chinese consumers worried about the economic future, as trade tension continues between China and the United States.

Apple’s lower prediction added to concerns that the iPhone maker² will keep losing ground in the important Chinese market. Experts say many Chinese consumers are likely to reject Apple’s iPhone price increases and instead buy less costly³ models from competitors.

Additional major American brands – including Ford⁴ Motor Company and Tiffany – have also recently suffered sharp sales drops in China.

The country is still one of the world’s fastest growing economies. China reported a third-quarter economic growth of 6.5 percent – stronger than most other major economies. But that was the country’s lowest rate of growth since the 2008 world economic crisis.

Economic experts have blamed Chinese consumer concerns on the country’s tariff⁵ dispute with the United States as well as an increase in news about falling automobile⁶ and real estate sales in China.

David Dollar is a China specialist at the Washington-based Brookings Institution. He described the change in how Chinese buyers see the future as “definitely worrying.” He added that overall, “consumption growth” is slowing down across China. The Associated Press reported his comments.

Emily Li is a 37-year-old advertising⁷ designer in Beijing. She told the AP she is delaying buying another car or making other major financial decisions right now. “People are worried about losing jobs,” she said.

Weakness in Chinese demand is especially painful for Apple and other smartphone makers⁸. China makes up one-third of the industry’s shipments worldwide.

Estimates from research company IDC showed smartphone shipments to China fell 10 percent from a year earlier in the quarter that ended in September.

Apple’s third-quarter shipments in China fell 13 percent from a year earlier to 7.5 million, IDC reported. That put Apple’s market share in fifth place in the Chinese market. Chinese smartphone manufacturer Huawei enjoys a 24.6 percent share.

In his letter to Apple shareholders, Cook gave no China sales numbers for the final quarter of the year. But he said sales decreased as consumer “uncertainty⁹” grew over the U.S.-China trade dispute.

Worldwide, Apple fell behind Huawei to become the number three brand by number of handsets sold in the third quarter, IDC reported. South Korea’s Samsung Electronics was in first place.

I’m Bryan Lynn.

Words in This Story

revenue – n. large amounts of money received by a company or government

consumer – n. person who buys goods and services

tariff – n. a tax on goods coming into or leaving a country

uncertainty – n. the act of not being sure about or not being able to decide about something

1 shareholders   

n.股东( shareholder的名词复数 )

参考例句：

• The meeting was attended by 90% of shareholders. 90%的股东出席了会议。
• the company's fiduciary duty to its shareholders 公司对股东负有的受托责任

2 maker   

n.制造者，制造商

参考例句：

• He is a trouble maker，You must be distant with him.他是个捣蛋鬼，你不要跟他在一起。
• A cabinet maker must be a master craftsman.家具木工必须是技艺高超的手艺人。

3 costly   

adj.昂贵的，价值高的，豪华的

参考例句：

• It must be very costly to keep up a house like this.维修这么一幢房子一定很昂贵。
• This dictionary is very useful,only it is a bit costly.这本词典很有用，左不过贵了些。

4 Ford   

n.浅滩，水浅可涉处；v.涉水，涉过

参考例句：

• They were guarding the bridge,so we forded the river.他们驻守在那座桥上，所以我们只能涉水过河。
• If you decide to ford a stream,be extremely careful.如果已决定要涉过小溪，必须极度小心。

5 tariff   

n.关税，税率；(旅馆、饭店等)价目表，收费表

参考例句：

• There is a very high tariff on jewelry.宝石类的关税率很高。
• The government is going to lower the tariff on importing cars.政府打算降低进口汽车的关税。

6 automobile   

n.汽车，机动车

参考例句：

• He is repairing the brake lever of an automobile.他正在修理汽车的刹车杆。
• The automobile slowed down to go around the curves in the road.汽车在路上转弯时放慢了速度。

7 advertising   

n.广告业；广告活动 a.广告的；广告业务的

参考例句：

• Can you give me any advice on getting into advertising? 你能指点我如何涉足广告业吗?
• The advertising campaign is aimed primarily at young people. 这个广告宣传运动主要是针对年轻人的。

8 makers   

n.制造者，制造商（maker的复数形式）

参考例句：

• The makers of the product assured us that there had been no sacrifice of quality. 这一产品的制造商向我们保证说他们没有牺牲质量。
• The makers are about to launch out a new product. 制造商们马上要生产一种新产品。 来自《简明英汉词典》

9 uncertainty   

n.易变，靠不住，不确知，不确定的事物

参考例句：

• Her comments will add to the uncertainty of the situation.她的批评将会使局势更加不稳定。
• After six weeks of uncertainty,the strain was beginning to take its toll.6个星期的忐忑不安后，压力开始产生影响了。