30% Down but Not Out: How Apple’s Latest iPhone Sales in China Signal a New Strategy for 2024

How Apple's Latest iPhone Sales in China Signal a New Strategy for 2024

According to a note from Jefferies analysts, Apple’s iPhone sales in China saw a sharp decline of 30% in the first week of 2024. This drop in sales contributed to a double-digit decrease in overall smartphone shipments in China for the same period, despite significant discounts on iPhones available via major online marketplaces.

While Huawei and other Android brands maintained flat growth year-on-year, Apple saw a significant drop due to increased competition from domestic rivals like Huawei. The iPhone maker also experienced a 3% decline in 2023 in its third-largest market, which represented a 0.4% decrease in its market share. The Jefferies report forecasts further declines in 2024 for Apple while Huawei is expected to gain additional market share.

Huawei’s comeback

After years of US sanctions, Huawei’s Mate 60 smartphone series, launched in August 2023, was seen as the company’s comeback to the high-end smartphone market. In the last quarter of last year, Huawei’s share in the Chinese smartphone market increased by about 6%, significantly impacting Apple’s sales. The Mate 60 series, combined with lower pricing strategies, helped Huawei gain an additional market share at the expense of Apple.

Bleak forecast for Apple

Analysts predict that Apple’s sales volumes will continue to decline by double digits in 2024 and beyond. On the other hand, Huawei is expected to continue gaining market share globally, with an anticipated 64 million smartphones predicted to be shipped worldwide in 2024, up from less than 35 million in 2023. Apple’s decline is largely due to competitive pressure from Chinese rivals like Huawei. With more Chinese smartphone manufacturers focusing on premium smartphones, this trend is expected to continue for the foreseeable future.

A Rebounding Market

Despite its recent setbacks, the Chinese smartphone market is poised for a rebound, with research firm IDC predicting a year-on-year sales growth in the fourth quarter of 2024 after ten consecutive quarters of falling shipments. As companies such as Huawei continue to innovate with new models, the market is expected to continue its recovery, with an increasing focus on advanced features and cutting-edge technology. As a result, Chinese smartphone makers are well-positioned to gain additional market share at the expense of global competitors like Apple.

Source: https://www.reuters.com/technology/apple-iphone-sales-china-fall-30-first-week-2024-jefferies-2024-01-08/