- iPhone slipped to fourth place in China in first weeks of 2024
- Apple focusing on other big bets like AI, Vision Pro headset
Apple Inc.’s iPhone sales in China fell by a surprising 24% over the first six weeks of this year, according to independent research that may stoke fears about worsening demand for the marquee but aging device.
The figures from Counterpoint Research add to pressure on the iPhone, which has struggled to replicate its usual success in the world’s largest smartphone arena. China’s mobile market shrank by 7% in the first weeks of this year, and the top share went to Dongguan-based Vivo, which targeted the budget segment, according to Counterpoint. To stimulate demand, Apple rolled out rare discounts on its web store in January, and online resellers are now cutting prices by as much as $180.
Apple shares slid 2.4% in New York on Tuesday morning. They have fallen about 11% since the start of the year. The company lost the title of world’s most valuable company to Microsoft Corp., and this month it was also removed from Goldman Sachs’ list of highest-conviction investments and Evercore ISI’s tactical outperform list.
On Tuesday, iPhone assembly partner Hon Hai Precision Industry Co. reported an 18% slump in sales over the first two months of the year. The handset accounts for more than half of Apple’s sales and a substantial proportion of the Taiwanese firm’s income.
An Apple spokesperson didn’t respond to a request for comment.
Still, Apple’s latest earnings report showed stronger iPhone sales in the holiday quarter and a return to revenue growth following four straight declines, despite weakness in China. Total revenue increased 2.1% to $119.6 billion, beating analysts’ estimates, but executives warned the current period will be sluggish again.
The Cupertino, California-based company has been ramping up investment on other big bets as it diversifies its product lineup and focuses on artificial intelligence. While Apple shut down a decade-long effort to build an electric car, the move will allow it to plow more resources into its recently launched Vision Pro headset — its first new product category in almost ten years — and to chase rivals in the generative AI industry.
Shenzhen-based Huawei Technologies Co. has been a thorn in Apple’s side since the surprising debut of its homegrown Mate 60 Pro devices, which triggered a wave of patriotic buying and took share away from the US company. Huawei jumped to 16.5% of the Chinese market in the first six weeks, up from 9.4%. The company that split from Huawei in 2020, Honor Device Co., was the only other major maker to show unit sales growth, at 2%. Apple’s market share fell below 16%, from 19%, according to the researchers.
“Despite a decline in consumer confidence, Huawei’s enhancements in production enabled the company to meet demand for its popular Mate 60 series,” said Counterpoint analyst Ivan Lam. “The previous year period was already quite depressed, but as far as Apple is concerned, there is more wriggle room in the short term. The aggressive promotions before Women’s Day are just one example.”
Written by: Vlad Savov @Bloomberg
The post “Apple’s iPhone Woes in China Deepen With a 24% Sales Plunge” first appeared on Bloomberg
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