A recent report from Jefferies analysts revealed a 30 per cent decline in iPhone sales in China during the first week of 2024. The dip highlights escalating competitive pressures from local contenders, including Huawei, posing a formidable challenge for the US company in one of its crucial markets.
Jefferies’ analysis indicates that the drop in Apple’s sales served as the primary catalyst for an overall double-digit slump in China’s smartphone shipments for the same period. Despite aggressive discounting on various iPhone models through major Chinese online platforms, such as the 16 per cent price reduction observed on the iPhone 15 Pro and iPhone 15 Pro Max on Pinduoduo, the decline persisted.
This downturn marks a considerable acceleration from the 3 per cent year-over-year (YoY) decrease that Apple experienced throughout 2023 in its third-largest market. The 3 per cent decline equated to a 0.4 per cent reduction in Apple’s market share, a trend that has evidently intensified in the early days of 2024.
Analysts attribute Apple’s decline to mounting competitive pressures from Chinese rivals, with Huawei at the forefront. Huawei’s resurgence in the high-end smartphone market with the Mate 60 series, launched in August 2023, is identified as a pivotal factor in Apple’s diminishing market share. The Mate 60 series is perceived as Huawei’s comeback after grappling with US sanctions in previous years.
Despite aggressive discounting, Apple’s sales faltered, while other Android brands and Huawei maintained relatively flat growth year-over-year in the same period, according to the Jefferies note. For the final quarter of 2023, Huawei’s share in the Chinese smartphone market reportedly surged by approximately 6 per cent, signaling a notable shift in dynamics.
Jefferies analysts foresee Apple grappling with more competitive pressure from domestic rivals throughout 2024. Their projections anticipate a continued double-digit decline in Apple’s shipment volumes, while Huawei is poised to gain market share significantly. The forecast estimates Huawei’s global smartphone shipments at around 64 million in 2024, a substantial increase from the reported less than 35 million in 2023.
