Analysts are predicting a rough year ahead for Apple in China, the world’s largest smartphone market, as it faces increasing competition from local rivals such as Huawei Technologies.
The iPhone-maker is already seeing a 30% sales plunge in the country in the first week of the year, Jefferies analysts said in a note published on Sunday.
Their forecast predicts Apple’s shipment volumes will continue declining by double digits in 2024, while Huawei is expected to continue gaining market share.
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Specifically, Jefferies analysts estimate that Huawei will ship approximately 64 million smartphones worldwide in 2024. That’s up substantially from the estimated less than 35 million shipped in 2023.
The fall in Apple’s sales comes despite a recovery in the Chinese smartphone market following a years-long slump.
Research firm IDC predicted an unspecified year-on-year sales growth in the fourth quarter in China after 10 consecutive quarters of falling smartphone shipments.
That turnaround has largely been on the back of a sales boom at Huawei, brought on by the Mate 60 series of phones it launched in August last year.
The Mate 60 line is widely viewed as marking Huawei’s comeback to the high-end smartphone market after years of US sanctions that had previously hampered its progress.
Apple’s discounts fall flat
Even so, China’s smartphone shipments also saw an overall double-digit drop for the first week, according to the Jefferies note. The decline in Apple’s sales during the period was the primary catalyst for that fall, the note said.
Other Android brands and Huawei achieved relatively flat growth year-over-year during this period, the note said.
The fall in Apple’s sales took place despite aggressive discounting of multiple iPhone models through major Chinese online marketplaces, according to the research note.
For example, the iPhone 15 Pro and iPhone 15 Pro Max received a 16% price reduction on the e-commerce platform Pinduoduo in the first week of 2024.
The 30% weekly drop represents an acceleration from the 3% year-over-year decline the US company saw for all of 2023 in its third-largest market, Jefferies said, adding that the brokerage derived this from its own market tracking. Specifically, the 3% decline in 2023 equated to a 0.4% decrease in Apple’s market share.
Meanwhile, for the final quarter of 2023, Huawei’s share in the Chinese smartphone market rose by about 6%, according to the note.
- Reuters, with additional editing by Vishakha Saxena
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