In a significant shift within the Chinese smartphone market, Apple witnessed a staggering 30% drop in iPhone sales during the first week of 2024, according to analysts from Jefferies.
This precipitous decline not only rattled Apple’s position but also served as the primary force behind a broader double-digit plummet in smartphone shipments across the country. It also underscores a fightback by Chinese companies against the dominance of American companies in the local market.
Jefferies, in a recently published note, revealed that despite robust discounting efforts on various iPhone models through major Chinese online platforms, including a 16% price slash on the iPhone 15 Pro and Pro Max on Pinduoduo, Apple struggled to retain its market share against the onslaught of domestic rivals.
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Analysts from Jefferies said this decline in Apple’s sales showcases intensified competition in China’s smartphone arena, particularly with the resurgence of Huawei.
Throughout 2023, Apple experienced a marginal 3% year-over-year dip in sales in China, marking a modest decline. However, this recent 30% plunge in the first week of 2024 signified a swift acceleration in the company’s struggle within its third-largest market.
The Jefferies analysts pinpointed the rise of Chinese competitors, notably Huawei, as a key factor behind Apple’s struggles. They highlighted the impact of Huawei’s triumphant return to the high-end smartphone market with its Mate 60 series, which emerged in August last year, marking a significant comeback post-U.S. sanctions that previously impeded the company’s progress.
Huawei’s resurgence in the market was unmistakable, securing a commendable 6% surge in market share in the Chinese smartphone realm for the final quarter of 2023. This growth trend, according to analysts, is poised to continue exerting pressure on Apple throughout 2024.
Our projections indicate a challenging year ahead for Apple, with an anticipated continuous decline in shipment volumes, while Huawei is expected to further solidify its market presence, the Jefferies note forecasted.
The analysts estimated Huawei’s shipment figures to soar to approximately 64 million smartphones globally in 2024, a substantial leap from the estimated less than 35 million units shipped in 2023.
This market upheaval in China has broader implications for the smartphone industry. Analysts, including those from IDC, anticipate a potential rebound for the Chinese smartphone market after a prolonged downturn. IDC forecasts unspecified year-on-year sales growth in the fourth quarter of 2023, signaling a potential turnaround after ten consecutive quarters of dwindling shipments.
Apple and Huawei did not respond immediately to requests for comment on this stark shift in market dynamics.
Apple’s grapple with sales decline and Huawei’s accelerating resurgence in China’s market marks the Chinese telecom giant’s growing defiance of the US sanctions. The analysts estimate that Huawei will ship approximately 64 million smartphones worldwide in 2024 – up substantially from the estimated less than 35 million shipped in 2023.
This new market dynamics set the stage for a fierce battle in the Chinese smartphone market, with ramifications expected to reverberate throughout the global tech industry.