The iPhone surges despite a smartphone slump, while China flexes its censorship powers in Hong Kong. Plus, our podcast gets a special guest.
IDC: iPhone on Top of Dismal Holiday Season for Smartphones
I feel like we’ve heard this before, but we heard it again Thursday from market tracker IDC. They say smartphone shipments were bad in 2022, with a shot of dismal for the holiday quarter. According to the firm, smartphone shipments saw their “largest-ever decline” last quarter, dropping 18.3% versus the holiday-quarter of 2021. For the year, smartphone shipments were down 11.3%. Last year was the worst year in nine-years according to the firm, with the 1.21-billion smartphones shipped the lowest yearly total since 2013. IDC says that was “due to significantly dampened consumer demand, inflation, and economic uncertainties.”
Focusing on iPhone — things might have been so much better. The way IDC sees it, Apple shipped 72.3-million iPhones last quarter. That was down 14.9% from the 85-million it’s estimated to have shipped in the same quarter a year earlier. While IDC says smartphones were down due to “dampened consumer demand, inflation, and economic uncertainties,” we know that Apple had serious trouble getting enough iPhones to meet demand thanks to COVID lockdowns at Foxconn’s primary production plant for iPhone 14 Pro and iPhone 14 Pro Max.
What’s amazing is — despite that trouble, Apple stayed on top in terms of smartphone shipments for the holiday quarter. In fact, Apple grew market share, grabbing a whole percentage point.
One can’t help wondering what kind of quarter iPhone would have had had “iPhone City” not suffered the issues it did.
Apple Surges Ahead of Smartphone Competitors
While second-place Samsung and fourth-place OPPO also grew their market share, neither managed as much as the one-percentage point Apple picked up. And nobody grew sales for the quarter, nor the year. By IDC’s reckoning, for the holiday quarter:
- Apple shipments were down the aforementioned 14.9% year-on-year
- Samsung’s were down 15.6%
- Xiaomi’s were down 26.3%
- OPPO’s were down 15.9%
- vivo’s were off 18.9%
- And the big box of “Others” was down 19.8%
Looking at the year as a whole — everybody lost, though Apple lost least. Running down 2022:
- Samsung shipments were down 4.1% versus 2021
- Apple’s were down 4.0%
- Xiaomi’s were down 19.8%
- OPPO’s were down 22.7%
- vivo’s were off 22.8%
- “Others” were down 9.1%
Offering something of a mixed message where Apple is concerned is Nabila Popal — research director with IDC’s World Tracker team. Quoting Ms. Popal:
…weakened demand and high inventory caused vendors to cut back drastically on shipments… Heavy sales and promotions during the quarter helped deplete existing inventory rather than drive shipment growth. (…) Even Apple, which thus far was seemingly immune, suffered a setback in its supply chain with unforeseen lockdowns at its key factories in China. What this holiday quarter tells us is that rising inflation and growing macro concerns continue to stunt consumer spending even more than expected and push out any possible recovery to the very end of 2023.
I’m sorry. Is that what it tells us about iPhone?
We will never know how iPhone sales would have gone had production not gone offline. That said, iPhone shipments grew in the first-quarter of 2022 according to IDC. iPhone shipments grew a tiny bit in the second-quarter according to IDC. And they grew again in the third-quarter according to (let me check my notes… ah! There it is!) IDC.
We will never know how iPhone sales would have gone had production not gone offline. Still, it kind of seems like Apple should be looked at on its own in this case, rather than lumping it in with the “dampened consumer demand” story.
Terms of Service: China Can Censor Hong Kong Internet on Apple Devices
Hey — does anybody know how to treat stories about Apple and China when it comes to Hong Kong?
Here is the story that was everywhere Thursday. A piece from The Intercept, highlighted by AppleInsider, says it looks like the “global code site GitLab” was blocked for a bit on Apple devices in Hong Kong last November. According to AppleInsider:
Safari aims to protect users from websites that may contain malware or other issues, and it does so by using blacklists of problematic sites. Those lists are maintained either by Google Safe Browsing, or China’s Tencent Safe Browsing — and it’s Tencent that is the issue.
See, Apple uses that Tencent list to block problematic sites in mainland China. While few deny that Hong Kong is part of China, their history is — really something. An article on Investopedia offers something of a synopsis. “In 1898,” the article says, “Britain negotiated a 99-year lease with China on its Hong Kong colony.” That ended in 1997, when “Hong Kong became the Hong Kong Special Administrative Region of the People’s Republic of China…” It seems that things weren’t really supposed to change though. At least not for a while. Quoting Investopedia again:
Under the doctrine of one country, two systems, China will allow the former colony to continue to govern itself and maintain many independent systems for a period of 50 years.
Anyway, that was the idea. But China is China and Hong Kong is part of China and, did I mention, China is China. A piece from the site Quartz written in mind-2020 outlines times Apple has done China’s bidding where Hong Kong was concerned. Quoting that piece:
Apple has long had to walk a tightrope between its commitment to user rights and placating China, on which it is heavily dependent as both a market and manufacturer. It regularly censors apps on its Chinese app store at the request of Beijing, including dozens of VPNs in 2017 and the Quartz app [in 2019]. It also removed the Taiwan flag emoji from its keyboard for users in Hong Kong and Macau.
While that is not an all-inclusive list, it does give one an idea of Apple’s dealings where the mainland and the former colony are concerned. And it brings us back to the Hong Kong/GitLab story.
Why was GitLab on the Tencent list of problematic sites? No one can say. How dose being on that list mean the site was blocked in Hong Kong? No one will say. An Apple spokesperson directed The Intercept to Tencent. Tencent declined to comment. “However,” says the piece from AppleInsider:
…at some point after November 24, 2022, Apple’s Safari privacy notice was updated to say that the Tencent list would be used for devices in Hong Kong too.
The same Apple spokesperson would not comment on when or why that happened.
Every few months we hear a new story of something Apple is doing in, with, or at the behest of China that lands somewhere between “somewhat troubling” and “ghastly.” And then you remember what Apple has said, that it follows the law of the land in any land with which it does business — or words to that effect.
I kind of need a shower.
I’ve gotta say, after that — the rest of today’s stories seem frivolous so… I think that’s gonna do it… I do have something decidedly more fun for you to check out, though.
Today on The Mac Observer’s Daily Observations Podcast
Friend of the show Charlotte Henry of The Addition (theaddition.substack.com) joins me to talk about streaming media. Is TV broken? Binge-TV or weekly viewing? Is Apple TV+ worth it? Hits, misses, and TV talk from both sides of the Atlantic.
If you’ve not tried The Daily Observations in a while, or ever even … I’d love it if you would. Monday through Friday, it’s 20-something minutes of other people and me talking tech news. Please — if you would… check it out. The Daily Observations Podcast from The Mac Observer.