Apple’s iPhone sales plunge 24% in China as Huawei recovers, report says

Sales of of Apple The iPhone crashed in China in the first six weeks of 2024, according to a report by Counterpoint Research.

The analyst firm said in a note on Tuesday, iPhone sales plunged 24% during the period as Apple faced stiff competition from domestic smartphone companies such as Huawei, Oppo, Vivo and Xiaomi.

In particular, Apple has come under severe 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 sales over the six-week period, but the declines were less pronounced than Apple’s. Oppo’s smartphone shipments fell 29% year-on-year, while Vivo and Xiaomi posted declines of 15% and 7% respectively, according to Counterpoint Research.

The best-performing smartphone brands for the first six weeks were Huawei and its spin-off Honor, which split from the tech giant in 2020 as a result of US sanctions.

Huawei’s smartphone shipments rose 64% year-over-year in the first six weeks of 2024, according to Counterpoint Research. Meanwhile, shipments of Honor phones added 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 domestic Chinese smartphone makers – including the resurgent Huawei.

Last year, Huawei launched a smartphone called the Mate 60 that had 5G connectivity. This came as a big surprise to the world as the US government hit Huawei with numerous sanctions in 2019 and 2020, cutting it off from key chips and technology needed for 5G mobile internet.

Once the world’s biggest smartphone player by sales volume, Huawei was really Apple’s only major rival in China when it came to high-end devices. Customers flocked to the iPhone after Huawei’s phones lost their competitiveness due to the lack of 5G and no cutting-edge semiconductors.

Huawei is seeing the first signs of revival with the Mate 60.

“Huawei is back, trying to win back defectors to the iPhone from a few years ago,” Neil Shah, an analyst at Counterpoint Research, told CNBC.

“There is some erosion for Apple, but to a greater extent other non-Apple brands in the premium segment are also feeling the heat from Huawei.”

“Apple also had an unusually higher ‘sell’ in January 2023 compared to 2024 as supply shifted to January following the China factory failure in Q4 2022,” Shah added.

Apple’s supply chain suffered major disruptions in late 2022 due to the Covid-19 lockdown in China.

— CNBC’s Arjun Harpal contributed to this report