Jefferies analysts revealed that Apple’s (NASDAQ:AAPL) iPhone sales in China experienced a sharp 30% decline in the first week of 2024, intensifying indications of heightened competition from local rivals such as Huawei. This substantial drop in Apple’s sales served as the primary driver for an overall double-digit decrease in China’s smartphone shipments during the initial week of the year, according to a note published by the brokerage on Sunday.
Despite Apple aggressively discounting multiple iPhone models on major Chinese online platforms, such as a 16% price reduction for the iPhone 15 Pro and iPhone 15 Pro Max on Pinduoduo, the sales decline persisted. This 30% drop represents an acceleration from the 3% year-over-year decline witnessed by Apple in China throughout 2023, which translated to a 0.4% decrease in the company’s market share, as per Jefferies’ market tracking.
Jefferies analysts attributed Apple’s decline primarily to competitive pressures from Chinese rivals, particularly Huawei. The latter launched its Mate 60 series of phones in August 2023, signaling a comeback to the high-end smartphone market after years of U.S. sanctions.
The Mate 60 line, seen as pivotal for Huawei’s resurgence, contributed to a 6% rise in the company’s share in the Chinese smartphone market during the final quarter of 2023, as stated in the Jefferies note. Apple and Huawei have not yet responded to requests for comment.
Looking ahead, Jefferies analysts predict that Apple will continue to face competitive challenges from domestic rivals throughout 2024. Their forecast anticipates a double-digit decline in Apple’s shipment volumes this year, while Huawei is expected to expand its market share. Specifically, analysts estimate that Huawei will ship around 64 million smartphones globally in 2024, a substantial increase from the estimated less than 35 million shipped in 2023.
Despite a prolonged slump, the Chinese smartphone market is poised for a rebound, as indicated by other analysts, with IDC forecasting unspecified year-on-year sales growth in the fourth quarter, marking a positive shift after ten consecutive quarters of declining shipments.
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