iPhones Are Now "Embarrassing" In China As Trade War Deepens

While the trade war threatens to cripple Huawei, the ongoing nationalist sentiment surging throughout China could be a boon for the Shenzhen-based telecommunications company.

Sam Li, who is employed by a state-owned telecom firm in Beijing, told the Shanghai Morning Post that he switched from Apple to Huawei following President Trump's deepening of the trade war targeting Chinese firms.

"It's kind of embarrassing to pull an iPhone out of your pocket nowadays when all the company executives use Huawei," Li said.

The International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker shows Huawei shipped 206 million smartphones, 105 million in mainland China, accounting for 26.4% of the domestic market last year. Apple placed fifth in the country with 9.1%. By 1Q19, that fell to 7% compared to a 3% share gain for Huawei, according to Counterpoint.

"Chinese consumers' love for Huawei can only increase because of the ban," said Kiranjeet Kaur, senior research manager at IDC Asia Pacific. "Unless of course hardware supply chain constraints affect the roll-out of its phones locally."

Apple is experiencing an innovation shortage and backlash across China. In 1Q19, iPhone shipments worldwide collapsed to 36.4 million units, a 30.2% decline YoY. Meanwhile, Huawei was the top smartphone manufacturer in the world for the first three months, recording positive growth. It should now make sense to Zero Hedge readers why President Trump and corporate elitists have waged an economic war on China; it's due to a rising China 

"The iPhone struggled to win over consumers in most major markets as competitors continue to eat away at Apple's market share," IDC said.

"Price cuts in China throughout the quarter along with favorable trade-in deals were still not enough to encourage consumers to upgrade."

Apple continues to hemorrhage market share in China, according to Zaker Li, a senior industry analyst at IHS Markit. "Putting aside political issues, Apple's product offering and pricing strategies will be core reasons behind its drop," he said.

A massive nationalist wave across China has engulfed social media channels in the last few weeks. Slogans like "switch to Huawei" have gone viral on social media.

Social media users who write supportive posts about Huawei tend to get thousands of likes on Weibo.

"Switch to Huawei! Hate those hypocrites," a Chinese e-commerce firm said on WeCat.

"The era of 5G has arrived. Huawei has far more cutting-edge technologies than Apple," said someone else on social media.

The US-China trade war continues to worsen by the day; it was only yesterday when we reported a Chinese company told all of its employees to boycott American products.

Another report showed a restaurant in China was charging a tariff to only American customers. An English translation of the sign read: "From now on, our store will charge 25% service fee (tariff) to American customers. If you don't understand, please consult the American Embassy!"

Earlier this week, we reported that CCTV 6, the movie channel of China's leading state television broadcaster, recently aired three anti-American movies.

The three movies are Korean war films: Heroic Sons and Daughters (1964), Battle on Shangganling Mountain (1954), and Surprise Attack (1960).

All last week, anti-American propaganda flourished across the country, with the slogan "Wanna talk? Let's talk. Wanna fight? Let's do it. Wanna bully us? Dream on!" going viral on Chinese social

Another report from Tuesday showed how a song titled "Trade War," has gone viral on one the largest Chinese social media platforms. The song begins with a chorus singing "Trade war! Trade war! Not afraid of the outrageous challenge! Not afraid of the outrageous challenge! A trade war is happening over the Pacific Ocean!"

As has been the case during previous trade feuds, nationalist sentiment is spreading throughout China, which with foreign markets closing off, maybe the only Trump - no pun intended - card left for China's economy, where even a modest hiccup could lead to recession. Meanwhile, while it is debatable if anyone wins a trade war, the escalating collapse in existing supply chains will only get much worse before it gets better, and will likely lead to a global trade recession or even a depression, which as we showed last week...