A recent report reveals a significant setback for Apple in the Chinese market, with iPhone sales plummeting by 24% in the first six weeks of 2024. Counterpoint Research analysts noted a broader decline of 7% in the overall mobile market in China, impacting companies like Apple, Oppo, and Vivo.
The downturn for Apple in China isn’t a sudden development but rather an ongoing challenge exacerbated by the slowing Chinese economy, escalating trade tensions, and growing nationalism. Customers, who previously favored Apple, are now turning towards domestic brands, particularly Huawei, according to Counterpoint.
Mengmeng Zhang, a senior analyst at Counterpoint, highlighted the intense competition Apple faces from Huawei in the high-end segment and pricing pressures from other Chinese rivals. The lack of significant upgrades in the iPhone 15 compared to its predecessors has also contributed to consumers holding onto older iPhone models.
In response to the report, Apple’s shares dipped 2.8% on Tuesday, reflecting investor concerns about weakening sales, especially in the crucial Chinese market. Despite not commenting on the report, Apple continues to offer discounts to mitigate the sales decline.
The challenging landscape in China extends beyond Apple, with a struggling economy, a sluggish housing market, and increased competition among high-end vendors, notably Huawei. Despite facing sanctions and restrictions from the US government, Huawei has managed to maintain its position in the Chinese market and is gaining momentum with its Mate 60 smartphone.
Jeff Fieldhack, a research director at Counterpoint, noted that Apple’s weaker performance in January this year compared to the same period last year isn’t a significant setback in the long term. He emphasized Apple’s successful iPhone launch and suggested that increased discounting and marketing efforts could help counter Huawei’s competition in China.
Despite Huawei’s higher demand compared to its supply, Apple retained its top position in the market by the end of last year, demonstrating resilience amid the challenging environment in China.