Apple encounters significant setback in China as its iPhone sales plummet by 24%

Apple faced a significant challenge in China as its iPhone sales dropped by 24 percent in the first six weeks of 2024, according to a report by research firm Counterpoint.

Contrastingly, Huawei, Apple’s strong rival, experienced a notable surge, with unit sales soaring by 64 percent during the same period.

This disparity raises concerns about Apple’s position in the market and potential slowdown in demand, as its share in the Chinese smartphone market fell to 15.7 percent, securing the fourth position.

Counterpoint’s report highlights a tough landscape for Apple, attributing its decline to increased competition from domestic rivals, particularly Huawei, which now holds the second spot in the Chinese market with a market share of 16.5 percent.

In response to the competition, Apple has implemented recent subsidies for certain iPhone models and previous discounts, indicating aggressive strategies while the overall smartphone market in China shrunk by 7 percent.

Counterpoint’s Senior Analyst, Mengmeng Zhang, emphasizes that Apple is facing a difficult situation, squeezed in the middle due to aggressive pricing from competitors like Oppo, Vivo, and Xiaomi.

The report notes that Huawei’s resurgence in premium smartphone sales, especially with the Mate 60 series, has contributed to its remarkable growth despite previous struggles under US sanctions.

Honor, Huawei’s spin-off, is the only other brand in the top five to witness sales growth during the first six weeks of the year, rising by 2 percent.

The report indicates Apple’s decline in market share from 19 percent to 15.7 percent, slipping to the fourth position from second place a year ago.

Meanwhile, Huawei’s rise to the second position highlights its successful rebound.

Vivo, despite a 15 percent sales decrease, retains its position as China’s top-selling smartphone maker.

Apple’s proactive measures, including discounts and subsidies, aimed to counter the decline and boost sales amid the challenging market conditions in China.

Apple’s struggle in the Chinese market is evident in its share prices, which fell by 1.6 percent in premarket trading, and an overall 10 percent loss in value this year.

The report underscores Huawei’s resilience and unexpected success in overcoming challenges, including US sanctions, to dominate the Chinese premium smartphone market.

The outcome of Apple’s aggressive strategies and competition in China will likely impact its revenue performance, potentially influencing investor confidence.

Apple shares saw a decline of 2.8 percent in New York trade following reports of its falling revenue.