In the wake of the new year, Apple faces a challenging start in China, as its iPhone sales reportedly plunged by 30% in the first week of 2024. Analysts from Jefferies shared this insight in a note, indicating a significant setback for the U.S. tech giant and shedding light on heightened competition from domestic rivals, including Huawei.
Competitive Pressures and Market Dynamics
Jefferies’ research note highlighted that the decline in Apple’s iPhone sales was a key factor contributing to an overall double-digit drop in China’s smartphone shipments during the initial week ofChina the year. While other Android brands and Huawei maintained relatively stable growth year-over-year, Apple experienced a noteworthy decline.
Aggressive Discounting and Market Response
Despite aggressive discounting efforts, including a 16% price reduction for the iPhone 15 Pro and iPhone 15 Pro Max on platforms like Pinduoduo, Apple’s sales took a hit. The note emphasized the competitive landscape and the impact of Huawei’s strategic moves, such as the launch of its Mate 60 series in August 2023.
Acceleration of Decline and Market Share Insights
Jefferies analysts noted that the 30% drop marked an acceleration from the 3% year-over-year decline Apple witnessed throughout 2023 in China. This decline, equivalent to a 0.4% decrease in market share, suggests an intensified competitive environment for Apple in one of its significant markets.
Huawei’s Market Resurgence
The report underscored Huawei’s resurgence in the high-end smartphone market, particularly with its Mate 60 series, considered a pivotal move after facing challenges due to U.S. sanctions. Huawei’s share in the Chinese smartphone market reportedly rose by approximately 6% in the final quarter of 2023.
Predictions for 2024
Jefferies analysts anticipate continued competitive pressure on Apple from domestic rivals throughout 2024. Their forecast suggests that Apple’s shipment volumes may see a continued double-digit decline, while Huawei is expected to further strengthen its market share. The estimation indicates Huawei potentially shipping around 64 million smartphones globally in 2024, a significant increase from the less than 35 million shipped in 2023.
Market Dynamics and Industry Outlook
In a broader context, the Chinese smartphone market, which experienced a prolonged slump, is anticipated to witness a rebound. Analysts, including research firm IDC, have predicted year-on-year sales growth in the fourth quarter, signaling a potential turnaround after ten consecutive quarters of falling shipments.
Response from Industry Players
As of now, neither Apple nor Huawei has provided an immediate response to these developments, leaving room for ongoing speculation and scrutiny within the tech industry.
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Credit: Yelin Mo and Brenda Goh