Apple iPhone sales plunge in China after 'stiff competition from resurgent Huawei'
Flagship Yuan Major Platform Marketplace By (€166) Alibaba's Tmall, Iphone As Last Week Stores Models As Subsidising Apple Certain On Much Began Through 1,300
Apple's iPhone sales in China fell 24% year-on-year in the first six weeks of 2024, according to research firm Counterpoint, as the US company faced increased competition from domestic rivals such as Huawei.
The tech giant's chief competitor in China in premium smartphones, Huawei, saw unit sales rise by 64% in the period, according to the report. This could fan fears of a slowdown in demand for the US company, whose revenue forecast for the current quarter was $6bn (€5.5bn) below analysts' expectations.
Shares of the iPhone maker were down 2.5% at one stage in the latest trading session and have lost about 10% of their value so far this year. Counterpoint's report said Apple's share of the Chinese smartphone market dropped to 15.7%, putting it in fourth place, compared with second place in the year-ago period when it had 19% market share.
Huawei rose to second place as its market share expanded to 16.5% from 9.4% a year earlier. The overall smartphone market in China shrank 7%, the report said.
Apple "faced stiff competition at the high end from a resurgent Huawei while getting squeezed in the middle on aggressive pricing from the likes of OPPO, Vivo and Xiaomi", Counterpoint's senior analyst Mengmeng Zhang said.
Apple began subsidising certain iPhone models by as much as 1,300 yuan (€166) last week through flagship stores on Tmall, Alibaba's major marketplace platform. It had already offered iPhone discounts of up to 500 yuan on its official sites last month.
Huawei has seen a resurgence in its premium smartphone sales after struggling for years with US curbs on the exports of key components to the company. Honor, the smartphone brand spun off from Huawei in 2020, was the only other top-five brand to see unit sales increase during the first six weeks of the year, up 2%. Chinese brands Vivo, Xiaomi and Oppo dropped 15%, 7% and 29%, respectively.
US stocks lost traction after a rally that spurred concern about high valuations for tech shares.
“Trees don’t grow to the sky,” said Kenny Polcari at SlateStone Wealth. “What is starting to concern some investors is whether or not some of these tech companies that have gotten stretched can in fact live up to the ‘lofty valuations’ that investors have placed on them.”