Huawei Winning Over iPhones In China, iPhone Sales Plummet

As of March 6th, according to the latest weekly sales tracking report of the Chinese smartphone market by Counterpoint Research, the first six weeks of 2024 saw a 7% decline in overall smartphone sales in China compared to the same period last year. Notably, Apple experienced a significant 24% drop, while Huawei saw a remarkable 64% increase in sales.

Despite Apple’s iPhone shipments surpassing Samsung globally for the first time in 2023, making it the top smartphone vendor worldwide, its performance in the Chinese market has suffered. The resurgence of Huawei’s Mate 60 series, powered by the Kirin processor, has notably impacted Apple’s sales in China.

TechInsights reported a 14.6% year-over-year decline in Apple’s shipments in China for Q4 2023, totaling 14 million units. Apple’s financial results for Q1 2024 (covering October to December 2023) showed a 2% increase in revenue to $119.575 billion, marking an end to four consecutive quarters of year-over-year revenue decline and setting new records for operating profit and earnings per share. However, revenue from the Greater China region (including mainland China, Hong Kong, and Taiwan) fell by 12.9%, making it the only major sales region where Apple experienced a decline, and marking its weakest performance in Greater China since Q1 2020.

Apple CEO Tim Cook attributed the decline in China to the fiscal Q1 2024 having one less week compared to the previous year and the appreciation of the US dollar against the Chinese yuan. Despite these challenges, Cook remained optimistic, noting that four of the top six best-selling smartphone models in urban China were iPhones.

Analysts believe Apple’s significant revenue drop in Greater China was influenced by the Huawei Mate 60 series’ success following its launch in late August 2023, a trend that continues to affect iPhone 15 series sales in the Chinese market. Counterpoint Research highlighted that while the overall smartphone market in China declined by 7% in the first six weeks of 2024, Huawei’s shipments surged by 64%, in stark contrast to Apple’s 24% decrease.

Counterpoint Research’s senior analyst, Zhang Mengmeng, pointed out that Apple’s iPhone faced strong competition from Huawei’s Mate 60 series in the high-end market and aggressive pricing strategies from brands like OPPO (excluding OnePlus), vivo, and Xiaomi in the mid-range market. The lack of significant upgrades in the iPhone 15 series compared to its predecessors led to a lack of motivation for Chinese consumers to switch, many of whom opted for the previous iPhone generation or switched to the Huawei Mate 60 series.

The report also noted declines in smartphone sales for OPPO (excluding OnePlus), vivo, and Xiaomi, with drops of 29%, 15%, and 7%, respectively. Honor was the only brand to achieve growth, with a 2% increase.

Counterpoint Research explained the overall decline in shipments by top smartphone manufacturers in the first six weeks of 2024 as partly due to unusually high sales in the same period in 2023, which were boosted by delayed production from December 2022, leading to significant year-over-year changes.

Senior analyst Ivan Lim from Counterpoint Research commented on the slow growth in the Chinese market due to weak spending and a few new product launches in Q1 2024. Huawei’s Mate 60 series continued to drive strong demand, highlighting a potential area for improvement for Apple, such as classic weekend promotion activities.

However, analyst Ming-Chi Kuo from TF International Securities expressed a pessimistic outlook for the iPhone’s future sales performance, predicting up to a 15% year-over-year decline due to structural challenges and competition from AI-enabled and foldable smartphones. In the Chinese market, iPhone’s weekly shipments have already seen a 30% to 40% year-over-year decrease.