Apple Faces Increasing Pressure as iPhone Sales in China Continue to Decline
BEIJING: Apple’s iPhone sales in China fell 30% in the first week of 2024, Jefferies analysts said in a note, adding to signs of growing competitive pressure on the US tech giant from domestic rivals such as Huawei.
Apple’s sales decline was the primary catalyst for China’s overall double-digit decline in smartphone shipments in the first week, according to a note released by the brokerage on Sunday. Other Android brands and Huawei achieved relatively flat year-on-year growth during this period, the note said.
This decline in Apple sales came despite aggressive discounting of several iPhone models by major Chinese online marketplaces, according to the study. For example, the iPhone 15 Pro and iPhone 15 Pro Max received a 16 percent price reduction from the online store in Pinduoduo in the first week of 2024.
The 30 percent drop represents an acceleration from the 3 percent annual decline the U.S. company saw through 2023 in its third-largest market, Jefferies said, adding that the brokerage derived this from its own market monitoring. More specifically, a 3 percent drop in 2023 meant a 0.4 percent drop in Apple’s market share.
Analysts at Jefferies said Apple’s decline was largely due to competitive pressure from Chinese rivals, particularly Huawei, which launched its Mate 60 phone series in August last year.
Apple and Huawei did not immediately respond to requests for comment.
The Mate 60 series is widely seen as marking Huawei’s return to the high-end smartphone market after years of US sanctions that had previously held back its progress.
In the last quarter of 2023, Huawei’s share of the Chinese smartphone market rose by about 6%, according to the note.
According to Jefferies analysts, Apple is likely to face more competitive pressure from domestic rivals throughout 2024. Their forecasts predict that Apple’s shipments will continue to decline by double digits in 2024, while Huawei is expected to continue to increase its market share.
More specifically, they estimate that Huawei will ship around 64 million smartphones worldwide in 2024, which is significantly higher than the estimated shipments of less than 35 million in 2023.
After years of decline, China’s smartphone market is poised for a rebound, analysts say, with research firm IDC forecasting unspecified annual sales growth in the fourth quarter after ten consecutive quarters of declining shipments.
