In the first week of January, Apple experienced a significant dip of over 30% in iPhone sales in China compared to the same period the previous year, according to analysts at Jefferies. In contrast, competitors like Xiaomi and Huawei maintained stable sales, with Jefferies predicting a double-digit decline in Apple’s iPhone volume for the entire year in China. The analysts anticipate heightened revenue pressure for Apple in the Chinese market throughout 2024.
This report comes on the heels of a challenging start to the year for Apple, marked by share declines following downgrades from Barclays and Piper Sandler, cautionary statements from key supplier Foxconn regarding a Q1 revenue decline, and reports of an impending antitrust lawsuit from the U.S. government.
Huawei emerged as the leader in gaining smartphone market share in China in 2023, experiencing a notable 6% year-over-year increase. In contrast, Apple witnessed a decline of approximately 4% in market share during the same period. The analysts noted that the iPhone’s lower market share year-over-year in China was an unexpected setback, attributing the trend to competition from Huawei, Xiaomi, and other players.
To counter this decline, Apple appears to be offering increased iPhone discounts in China, a strategy to defend its market share. The analysts observed a significant rise in discounts for certain iPhone 14 models in China during the past week, with some existing discounts receiving further adjustments.
While Apple’s shares experienced a minor pre-market dip of less than 1% before the announcement of its Vision Pro headset release date, they have since stabilized, with less than a 1% increase.
The challenges Apple faces in the Chinese market underscore the intensifying competition and changing dynamics in the global smartphone landscape, with regional players making significant gains against the tech giant.
