Apple iPhone sales plunge 24% in China

Sales of Apple’s iPhone plunged in China in the first six weeks of 2024.

The analyst firm said in a note on March 4 that iPhone sales dropped 24 per cent in the period, as Apple faced stiff competition from local smartphone firms like Huawei, Oppo, Vivo and Xiaomi, CNBC reports citing a Counterpoint Research report.

Apple shares were down more than two per cent in early trading in the US.

Apple came under particular pressure from Chinese tech giant Huawei, whose consumer business is experiencing a resurgence in China after the launch of its Mate 60 smartphone.

Several rival Chinese smartphone companies also logged drops in their unit sales in the six-week period, but the declines were less pronounced than that of Apple.

Oppo’s smartphone shipments fell 29 per cent year on year, while Vivo and Xiaomi logged declines of 15 per cent and 7 per cent, respectively, according to Counterpoint Research.

The best-performing smartphone brands for the first six weeks were Huawei and its spinoff Honor, which branched out of the tech giant in 2020 as a result of US sanctions.

Huawei smartphone unit shipments rose 64 per cent year over year in the first six weeks of 2024, according to Counterpoint Research. Shipments of Honor handsets, meanwhile, added 2 per cent.

Apple is facing a tough environment in its key market, China. Several notable trends are adding pressure, not least of which is intense competition from local Chinese smartphone makers — including a resurging Huawei.

Last year, Huawei launched a smartphone called the Mate 60, which had 5G connectivity. That was a major surprise to the world, as the U.S. government hit Huawei with numerous sanctions in 2019 and 2020, cutting it off from key chips and technology required for 5G mobile internet.

Once the world’s largest smartphone player by sale volume, Huawei was really the only major challenger to Apple in China when it came to high-end devices. Customers flocked to iPhones, once Huawei’s phones lost their competitiveness due to the lack of 5G and no cutting-edge semiconductors.

Huawei is seeing the early signs of a revival with the Mate 60.

“Huawei is making a come back trying to win back the defectors to iPhone from a couple of years ago,” Neil Shah, analyst at Counterpoint Research, told CNBC.

“There is some erosion for Apple but more so it’s other non-Apple brands in the premium segment also feeling the heat from Huawei.”

“Apple also had abnormally higher ‘sell-through’ in January 2023 vs. 2024 as the supply shifted to January after the China factory debacle in the fourth quarter of 2022,” Shah added.

Apple’s supply chain experienced major disruptions in late 2022 due to Covid-19 lockdowns in China.