Apple’s grip on the world’s largest smartphone market, China, is loosening. During its recent earnings call, the tech giant reported a significant drop in iPhone sales, marking the biggest decline since late 2020. This slump comes amidst fierce competition from domestic Chinese brands like Huawei and Vivo.
Weakening Demand and Revenue Drop:
The decline in iPhone sales translates to a 10% year-over-year decrease in revenue from Apple’s flagship product, reaching $45.7 billion for the quarter ending in March. Notably, “Greater China,” a crucial market encompassing mainland China, Hong Kong, and Taiwan, witnessed an 8% drop in iPhone sales to $16.4 billion during the same period.
Tim Cook’s Take on the Chinese Market:
Despite the challenges, Apple CEO Tim Cook acknowledges China’s significance, calling it “the most competitive market in the world” for the company. However, he maintains a long-term optimistic view, citing his “very warm and highly energetic” reception during a recent visit with a new store opening in Shanghai. Cook emphasizes his long-term confidence, stating, “I don’t know how each and every quarter goes… But over the long haul, I have a very positive viewpoint.”
Apple Losing Ground:
Data from Counterpoint paints a concerning picture. Apple’s market share in China’s smartphone market has shrunk due to a 19.1% drop in iPhone sales during the first quarter. This decline has pushed Apple to third place, trailing behind local players Vivo (17.4%) and Honor (16.1%).
Rise of Domestic Brands:
Huawei’s resurgence is a significant factor. Fueled by nationalistic support and their domestically produced chip (Mate 60 series), Huawei’s smartphone sales in China skyrocketed by nearly 70% in the first quarter, securing a 15.5% market share. The recent launch of their Pura 70 series, also boasting a locally-made processor, positions them as a direct competitor to Apple’s upcoming iPhone 15 and 16 series.
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