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iPhone 8 helped Apple sell 40% more smartphones in China last quarter

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While U.S. customers may be indifferent to the new iPhone 8, it appears to be a different story in China. As a result, that Apple saw its first increase smartphone sales in that critical market after an 18-month losing streak.

According to a report from Canalys, sales of iPhones rebounded this quarter, growing 40 percent to 11 million from 8 million for the same period a year ago. The research firm noted that Apple had posted year-over-year declines in iPhone sales for the Chinese market over the previous six quarters.

Canalys attributed the turnaround to the iPhone 8. It said the new version accounted for a higher proportion of sales this year then the iPhone 7 series did at the same point last year. In the U.S., reports have indicated that the iPhone 7 remains more popular with shoppers so far.

The news is a hopeful sign for Apple, which once saw the Chinese market as a massive engine of growth. Over the past two years, Apple has seen sales stall there despite big investments. Instead, local brands that sell Android-based smartphones have dominated sales growth in China.

Canalys overall remains bearish about Apple’s prospects in China. The firm isn’t convinced Apple can sustain this new momentum. The firm said price cuts to older models have helped temporarily. But while there is high interest in the iPhone X, the high costs and limited supply means it won’t be a big factor in sales for this current holiday quarter.

“Apple’s growth this quarter is only temporary. The high sell-in caters to the pent-up demand of iPhone upgraders in the absence of the iPhone X. Price cuts on earlier models after announcing the iPhone 8 have also helped. However, Apple is unlikely to sustain this growth in Q4,” said Canalys Research Analyst Mo Jia in statement.

Just as problematic is that the overall Chinese handset market is weakening. Canalys reported that Chinese smartphone shipments fell 5 percent in Q3 2017 to 119 million units.

The three top brands are Huawei (19 percent), Oppo (18 percent), and Vivo (17 percent.) market share respectively. Huawei saw an increase of 23 percent to 22 million units, emphasizing just how far behind Apple has fallen. Oppo shipped 21 million, and Vivo sold 20 million.

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