iPhone market share shrinks further in China: Kantar

Unlike the reviving momentum in the United States and European markets, Apple's iPhone sales are continuing to lose steam in China, the most populated market in the world.

Sales in China accounted for 17.9 percent of the market in the second quarter of 2016, a drop of 1.8 percentage points from 19.7 percent during the same period last year, according to a Kantar report released this week.

Apple is currently behind Huawei and Xiaomi in the Chinese market, which accounted for 25.7 percent and 18.5 percent, respectively, during the period.

Meanwhile, despite the popularity of the budget iPhone SE in the country, supply constraints have stymied Apple's penetration, with the handset accounting for just 2.5 percent of overall smartphone sales in the second quarter.

As sales data shows that 51 percent of Chinese iPhone owners are currently using the iPhone 5s or older handsets, Kantar believes these consumers are likely to upgrade their smartphones to the latest 4-inch iPhone, which ups the prospects of the iPhone SE through the third quarter if supplies become less constrained.

Bloomberg on Wednesday reported that Apple is planning to announce the next version of its flagship smartphone models on September 7. Market rumors generally expect less significant updates on the upcoming new models, with consumers to wait until next year for completely redesigned iPhones.

Apple has encountered a sales bottleneck in China, with a recent filing saying sales in the Greater China market were down by 33 percent to $8.8 billion for the three-month period ending in June, compared to the 112 percent gain a year earlier.

China has also lost its crown as Apple's largest overseas market, with Europe contributing $9.6 billion in revenue during the quarter.