Apple’s iPhone sales in China plunged 24 percent due to Huawei’s surge in popularity

Apple’s iPhone sales in China fell 24 percent year-on-year in the first six weeks of 2024, according to research firm Counterpoint, as the US company faces increased competition from domestic rivals such as Huawei.

The US tech giant’s main rival in China in premium smartphones, Huawei, saw sales grow 64 percent during the period, according to the report.

This could fuel fears of a slowdown in demand for the US company, whose revenue forecast for the current quarter was $6 billion (roughly Rs 49,740 crore) below Wall Street expectations.

Shares of the iPhone maker closed down 2.8 percent on Tuesday and have lost about 12 percent of their value so far this year, underperforming their big tech peers in the United States.

The Counterpoint report said Apple’s share of the Chinese smartphone market fell to 15.7 percent, placing it in fourth place, down from second place in the previous period, when it had a 19 percent market share.

Huawei climbed to second place as its market share expanded to 16.5 percent from 9.4 percent a year earlier. China’s overall smartphone market shrank 7 percent, the report said.

Apple “faced strong competition at the high end from the resurgent Huawei, while being squeezed in the middle by aggressive pricing from the likes of OPPO, Vivo and Xiaomi,” Counterpoint senior analyst Mengmeng Zhang said.

Apple began subsidizing certain iPhone models by up to CNY 1,300 ($180.68) last week through flagship stores on Tmall, Alibaba’s main marketplace.

It already offered iPhone discounts of up to CNY 500 on its official sites last month.

Huawei has seen a resurgence in premium smartphone sales since it launched its Mate 60 series in August after years of battling US restrictions on exports of key components for the company.

Honor, the smartphone brand spun off from Huawei in 2020, was the only other top five brand to post a 2 percent increase in sales in the first six weeks of the year. Chinese brands Vivo, Xiaomi and Oppo fell by 15%, 7% and 29% respectively.

© Thomson Reuters 2024