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Customers learn about the newly launched iPhone15 at an Apple Store in Yantai, East China’s Shandong province on September 28, 2023.
Costfoto | Nurfoto | getty images
of sale of apple iPhone sales declined in China in the first six weeks of 2024, Counterpoint Research reports.
iPhone sales declined 24% in the period as Apple faced stiff competition from local smartphone companies like Huawei, Oppo, Vivo and Xiaomi, the analyst firm said in a note on Tuesday.
Apple shares were down more than 2% in early trading in the US
Apple has been under particular pressure from Chinese tech giant Huawei, whose consumer business is experiencing a resurgence in China following the launch of its Mate 60 smartphone.
Several rival Chinese smartphone companies also reported declines in their unit sales over the six-week period, but the decline was less pronounced than Apple’s.
According to Counterpoint Research, Oppo’s smartphone shipments declined 29% year-on-year, while Vivo and Xiaomi reported declines of 15% and 7%, respectively.
The best-performing smartphone brands in the first six weeks were Huawei and its spinoff Honor, which fell out of the tech giant in 2020 as a result of US sanctions.
According to Counterpoint Research, Huawei smartphone unit shipments in the first six weeks of 2024 increased by 64% year over year. Meanwhile, Honor handset shipments increased by 2%.
Apple is facing a difficult environment in its key market China. Several notable trends are adding to the pressure, not the least of which is intense competition from local Chinese smartphone makers – including a resurgent Huawei.
Last year, Huawei launched a smartphone called Mate 60, which had 5G connectivity. This came as a big surprise to the world, as the US government imposed several sanctions on Huawei in 2019 and 2020, cutting it off from key chips and technology needed for 5G mobile internet.
Huawei, once the world’s largest smartphone company by sales volume, was actually the only major challenger to Apple in China in terms of high-end devices. Once Huawei phones lost their competitiveness due to the lack of 5G and no cutting-edge semiconductors, customers gravitated towards iPhones.
Huawei is seeing early signs of revival with the Mate 60.
“Huawei is making a comeback in an attempt to win back people who left the iPhone a few years ago,” Neil Shah, analyst at Counterpoint Research, told CNBC.
“There have been some losses for Apple, but even more so other non-Apple brands in the premium segment are feeling the heat from Huawei.”
“Apple’s ‘sell-through’ in January 2023 versus 2024 was also unusually high as supply shifted to January following the China factory failure in Q4 2022,” Shah said.
Apple’s supply chain experienced major disruption in late 2022 due to the COVID-19 lockdown in China.
— CNBC’s Arjun Kharpal contributed to this report.
