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Apple Faces Decline in iPhone Sales in China
Recent data reveals that Apple experienced a substantial 19% drop in iPhone sales in China at the commencement of the year, marking the company’s most challenging performance in the region since the onset of the COVID-19 pandemic in 2020. This decline significantly impacted Apple’s presence in the Chinese smartphone market.
Falling Market Share and Competition Effects
Counterpoint Research reported that Apple’s market share in China plummeted to 15.7% in the first quarter of 2024, a significant decrease from 19.7% the previous year. The primary catalyst for this decline stemmed from heightened competition with Huawei, a domestic competitor that achieved a remarkable 70% surge in smartphone sales following the launch of its Mate 60 Pro series. Consequently, Apple found itself relegated to the third position in market share behind Chinese brands Vivo and Honor, with Huawei closely trailing behind.
Impact on iPhone Sales and Prospects for Recovery
iPhone sales in China experienced a 24% year-over-year decrease in the initial six weeks of 2024, primarily due to intensified rivalry with Huawei and the challenges posed by extraordinarily high sales figures from the preceding year. Despite this setback, the smartphone market in China demonstrated signs of rebounding, with overall sales showing a modest 1.5% growth compared to the previous year. Ethan Qi, an associate director at Counterpoint Research, expressed optimism regarding the sector’s recovery trajectory, attributing the growth to robust sales promotions during the Chinese New Year period.
Ivan Lam, a senior research analyst at Counterpoint Research, highlighted that Apple’s subdued performance in the premium segment was directly influenced by Huawei’s resurgence. Moreover, subdued replacement demand for Apple devices also contributed to the decline in sales. Lam, however, remains cautiously optimistic about Apple’s potential for recovery, suggesting that the introduction of new color options and aggressive sales initiatives in the second quarter could steer the brand back towards positive growth. Anticipation also surrounds Apple’s upcoming AI features set to be unveiled at the Worldwide Developers Conference (WWDC) in June, which could significantly impact the brand’s long-term trajectory.
Assessment of Huawei’s Semiconductor Technology
Secretary of Commerce Gina Raimondo recently commented on the semiconductor technology utilized in Huawei’s Mate 60 Pro smartphone, asserting that it lags significantly behind the advanced chips produced in the U.S. This observation underscores potential challenges for Huawei in maintaining technological superiority within the global smartphone market.
As a result of these market dynamics, Apple’s stock remained relatively stable in pre-market trading on Tuesday, showing a slight decline of about 10% since the beginning of the year.
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