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Apple’s market share drops to fifth place in China as local brands become more acceptable

| Jul 07, 2016 05:27 PM EDT

Customers experience Apple products as Nanjing opens second Apple Store on Jan. 16, 2016 in Nanjing, Jiangsu Province of China.

With local Chinese companies are securing more and more of the domestic smartphone market pie, Apple Inc. has slipped to the fifth position in terms of sales volumes. As of now, China remains Apple's second largest market outside the United States.

Apple was ranked third at the end of the first quarter of the year, but slipped to the fifth place in May with only 11 percent of the total market share, a report published by Counterpoint Technology Market Research revealed. Apple's revenue in greater China, including Taiwan and Hong Kong dropped fell 26% in the first quarter, resulting in the first-ever quarterly corporate revenue decline since 2003.

The Cupertino tech titan is fast losing ground to local rivals like Xiaomi and Huawei. Apple's loss is primarily being attributed to the company's latest models of iPhones. Most people are of the view that the tech giant has nothing new to offer in terms of its iPhone phones.

China has always been an important market for Apple and CEO Tim Cook has made several trips to the Communist nation China to help promote the brand. However, its market share has been dwindling over the past five years, as no less than half dozen local food chain companies have ventured into the smartphone market, Forbes reported.

Most of these companies have been manufacturing low-end varieties of the Samsung Galaxy or the iPhone. Many have been reportedly marketing iPhone clones also. However, tech firms like Xiaomi and Huawei have made major improvements in the design and quality of their devices. As a result, they have succeeded in winning over a large section of the local buyers.

Over the years, China has been facing an excess of smartphone manufacturers, thereby pushing Apple and Samsung a few places down in the line. While industry watchers are of the view that China has over-invested, iPhone fans in the country are not very eager to upgrade their older handsets. All these have led to erosion in Apple's market share.

For long, Chinese consumers considered purchasing Western brands worth their money, as they offered superior quality smartphones. However, Chinese consumer tech is finally posing stiff competition to Samsung and various Western brands. With the Chinese tech firms improving their product lines, it has become more difficult for Apple to compete with the array of new local brands and models.

See how Apple's market share dropped in China below:

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