As per Edison Lee and his Jefferies Analysts team, Apple Inc. is projected to face a difficult situation in China as iPhone sales are predicted to decrease by double digits, and volumes are forecast to further contract in the upcoming year.
Lee and colleagues noted recent industry checks that show a significant 30 percent year-over-year fall in sales of the most recent generation of iPhones in China after the devices had an abysmal start to the year. This loss coincides with the rest of the nation’s mobile market’s dissimilar growth in December, as Huawei Technologies Co. emerged as the company with the greatest growth rate thanks to its new Mate 60 smartphone series.
Image Source: bloomberg.com
Weeks prior to the iPhone 15 was released in September, Huawei’s Mate 60 Pro, which is powered by a system processor made in the country, was introduced, sparking a wave of nationalistic fervour. This zeal helped Huawei win back clients that it had previously lost to Apple. According to Jefferies, Huawei supplied 35 million handsets in 2023 regardless of some supply issues.
Apple had a Notable Double-Digit Decline in December
Conversely, Apple had a notable double-digit decline in volume throughout December. According to Jefferies, the downturn will continue till 2024. Last week, many online shopping sites raised their discounts on Apple’s smartphone lineup in an effort to buck the trend. Nonetheless, it appears that this tactic has affected the average selling price without leading to a commensurate rise in volume.
Due to United States sanctions that restricted Huawei’s accessibility to top manufacturers of chips in 2020, the multinational technology company first increased its dominance in the market in China. But thanks to the Mate 60 lineup and its efforts to create its own software ecosystem, Huawei has made a strong comeback in the mobile industry and is now able to take on both Alphabet Inc.’s Android as well as Apple’s iOS.
The Chinese market’s reaction to Huawei’s offers points to a complicated environment ahead for Apple as it navigates these challenges, one marked by more competition and shifting consumer preferences.
“As we highlighted last week, iPhone’s lower market share YoY in China is a negative surprise, and we believe the cannibalization is coming from not just HW, but also Xiaomi and ‘others,’” the analysts said, referring to Huawei.
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