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Apple's market turmoil: iPhone sales plummet in China as Huawei soars – Is this the beginning of the end for Apple?

iPhone sales plummet in China

Recent data from Counterpoint Research reveals a notable decline in Apple's iPhone sales in China, highlighting a 24% year-on-year drop in the first six weeks of 2024. This decline is attributed to the intensifying competition Apple faces from Chinese manufacturers, particularly Huawei.

Huawei, which competes directly with Apple in the premium smartphone segment in China, experienced a significant 64% increase in unit sales during the same period. The data suggests a changing dynamic in the Chinese smartphone market, where domestic brands are gaining ground as reported by Reuters.

The decline in Apple's sales in China could raise concerns about a potential decrease in demand for the company's products. This is especially relevant given that Apple's revenue forecast for the current quarter is already $6 billion below the expectations set by Wall Street analysts.

The company's financial performance appears to be under scrutiny, as evidenced by a 1.6% drop in its shares in premarket trading on a recent Tuesday. Additionally, Apple's shares have lost approximately 10% of their value since the start of the year, lagging behind other major tech companies in the United States.

According to Counterpoint's analysis, Apple's market share in China's smartphone sector fell to 15.7%, positioning the company in fourth place. This is a decrease from the second place it held in the previous year when it had a 19% market share.

Meanwhile, Huawei has climbed to second place, with its market share growing to 16.5%, up from 9.4% the year before. The overall smartphone market in China, however, experienced a 7% contraction.

Apple's challenges in China are multifaceted. The company is not only facing robust competition at the high-end segment from a revitalized Huawei but is also being pressured by mid-range competitors like OPPO, Vivo, and Xiaomi, who are aggressive in their pricing strategies.

Mengmeng Zhang, a senior analyst at Counterpoint, highlighted these competitive pressures. In response to these challenges, Apple initiated a subsidy program for certain iPhone models, offering discounts as high as 1,300 yuan ($180.68) through its flagship stores on Tmall, Alibaba's major online marketplace. This followed earlier discount offers of up to 500 yuan on its official sites.

Huawei's resurgence in the premium smartphone market is noteworthy, particularly with the launch of its Mate 60 series in August. This comes after the company faced several years of challenges due to U.S. restrictions on exporting key components to it.

Honor, a brand spun off from Huawei in 2020, was another Chinese brand that saw an increase in unit sales during the first six weeks of the year, with a 2% rise. In contrast, other Chinese brands such as Vivo, Xiaomi, and Oppo experienced sales declines of 15%, 7%, and 29% respectively.



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