Title: Apple Faces 24% Drop in iPhone Sales in China Amidst Intensifying Competition and Economic Challenges
The first six weeks of 2024 have brought a significant blow to Apple Inc. with a reported 24% decline in iPhone sales, as per the latest research from Counterpoint. This disheartening news adds to the mounting concerns for Apple and other Western tech companies attempting to navigate the crucial Chinese market.
The overall mobile market in China experienced a 7% decline during this period, with major players such as Apple, Oppo, Vivo, and Xiaomi reporting decreases. However, the situation for Apple is more concerning given the prolonged economic slowdown in China, intensifying trade tensions, and growing nationalism sentiments.
According to Counterpoint’s Senior Analyst Mengmeng Zhang, Apple has been facing stiff competition at both ends of the market. On one hand, Apple is experiencing intense rivalry from a resurgent Huawei at the high-end segment. Conversely, aggressive pricing strategies from mid-range players like Oppo, Vivo, and Xiaomi have squeezed Apple in the middle ground.
Zhang added that despite the impressive features of the iPhone 15, consumers seem content with their older-generation iPhones given the lack of significant upgrades. The report triggered a 2.9% slide in Apple’s shares on Tuesday afternoon, extending their yearly decline to approximately 11.7%.
Apple did not comment on the matter. However, it is worth noting that China remains a pivotal market for Apple, being the second-largest behind the United States. In the previous year, Apple recorded substantial growth in China during its launch period. Despite the current downturn, Apple continues to offer discounts to mitigate some of the losses.
Huawei’s Mate 60 made headlines last year when the US government sought detailed information about its Pro model, featuring an advanced processor. The unexpected debut from Huawei left industry experts questioning how the Chinese manufacturer could produce such a sophisticated chip amidst US efforts to limit China’s access to foreign chip technology, citing perceived national Website security concerns.
Now, some Chinese consumers feel wronged by the US government sanctions and have started gravitating towards Huawei’s Mate 60 smartphone. With demand exceeding supply, Huawei could potentially sell more units if the situation permits.
Jeff Fieldhack, a Research Director at Counterpoint, revealed that Apple’s strong January performance in 2023 was due to part shortages, which didn’t reoccur this year. He further explained that although this issue is not a major setback for Apple in the long term, there are opportunities for the tech giant to boost sales through marketing efforts and discounts in China.
As of January 2024, Huawei accounted for 17% of the mobile market share in China, while Apple claimed a 16% share. Given the current demand and supply discrepancy, Huawei could potentially capture more market share if they address their supply challenges effectively.
Apple’s position as the top player in China at the end of 2023 was a remarkable achievement, considering the headwinds it faced. Fieldhack remains optimistic that Apple can bounce back with appropriate marketing strategies and discounts in China to counteract the competition from Huawei and other mid-range players.
