LeEco, the Chinese firm reported to be "taking on" Apple (as well as Tesla and Netflix) less than a year ago in an ambitious American expansion with new headquarters in San Jose, is now laying off employees and selling its property after running out of cash.
Apple's decline in Chinese iPhone shipments during 2016 can be blamed on the company refusing to adapt its tactics to the local market out of fear of risking its business elsewhere, according to Duan Yongping, the founder of Chinese smartphone brands Oppo and Vivo.
Apple's iPhone continued to grab the vast majority of smartphone profits globally, due to poor performance by Samsung and largely profitless production of massive numbers of lower end models by several companies in China.
Apple continued to struggle for ground in China during the December quarter, ceding fourth place in the country's smartphone market under pressure from local brands like Huawei and Xiaomi, according to new research data.
Several major Chinese smartphone vendors are forming a consortium with a supplier to invest in AMOLED production in 2017, mainly out of worries that Apple will end up monopolizing panel supplies with upcoming iPhones, according to reports.
Shares of Apple increased nearly 2 percent today to close at $98.79, close to the peak the stock has traded since diving below $100 after the company reported its fiscal Q2 earnings. Within two weeks, Apple will announce its earnings for Q3, which ended in June.
Apple's year-over-year drop in smartphone sales during the March quarter also caused the company to lose marketshare, though part of the shift can be linked to fast-rising Chinese smartphone makers, according to new research data.
During the March quarter Apple's iPhone remained firmly in second place in global smartphone marketshare, but saw a significant drop year-over-year to 15.3 percent, ceding some ground to up-and-coming Chinese vendors.
Chinese and Taiwanese smartphone suppliers are reportedly scaling back component production in the wake of Apple's iPhone SE, which appears to be impacting the sales of local smartphone brands.
Apple's smartphone marketshare in "urban China" dropped 3.2 percentage points year-over-year during the spring quarter of 2016 — marking the company's first such decline in the region since August 2014, according to research data published on Wednesday.
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Daniel Eran Dilger
Roger Fingas
