Apple’s iPhone Shipments In China Drop 2% Amidst Huawei’s Market Resurgence

Beijing, January 25, 2024 – Apple’s (AAPL.O) smartphone shipments in China witnessed a 2.1% decline in the final quarter of 2023 compared to the same period the previous year, according to data from research firm IDC. The dip underscores the growing competition from local rivals, primarily led by Huawei, presenting challenges for Apple in its third-largest market.

Intensifying competition, particularly from Huawei, played a significant role in the contraction of Apple’s market share in China. Huawei, despite facing setbacks due to U.S. sanctions, experienced a remarkable comeback with a 36.2% increase in shipments in the final quarter of 2023, as per IDC figures. The surge propelled Huawei to become the fourth-largest smartphone vendor in China, capturing a 13.9% market share, up from 10.3% in the same period the previous year.

While Apple managed to secure the top spot as the leading smartphone seller in China for the full year 2023, claiming a 17.3% market share, analysts predict potential challenges ahead. IDC notes that Apple’s high-end market share in China has been impacted by rival products and limited product upgrades, reducing the overall appeal of iPhones. Despite this, Apple continues to attract demand through substantial discounts and promotions carried out via third-party distribution channels.

The competitive landscape in China’s smartphone market is evolving, with Apple’s recent rare discounts on iPhones and Huawei’s projected rise in market share for 2024. Jefferies analysts anticipate a double-digit decline in Apple’s shipment volumes in 2024, while Huawei is expected to strengthen its position, estimating shipments of around 64 million smartphones worldwide, a significant increase from the projected 35 million units for 2023.

Overall, China’s smartphone market witnessed a shipment volume of 73.63 million units in the fourth quarter of 2023. For the full year, the shipment volume reached 271 million units, representing a 5% decrease, according to IDC. Apple is set to release its quarterly results next week, shedding more light on the company’s performance in the challenging Chinese market.($1 = 7.1496 yuan)