Customers are introduced to the newly launched iPhone15 at an Apple Store in Yantai, east China's Shandong Province, on September 28, 2023.
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Sales of apples The price of the iPhone in China fell in the first six weeks of 2024, according to a Counterpoint Research report.
iPhone sales fell 24% during the period, as Apple faced stiff competition from local smartphone companies such as Huawei, Oppo, Vivo and Xiaomi, the analyst firm said in a note on Tuesday.
In particular, Apple has come under significant pressure from Chinese tech giant Huawei, whose consumer business is seeing a rebound in China after the launch of its Mate 60 smartphone.
Several competing Chinese smartphone companies also reported declines in their unit sales during the six-week period, but the declines were less pronounced than Apple's sales decline. Oppo's smartphone shipments fell by 29% year-on-year, while Vivo and Xiaomi recorded declines of 15% and 7%, respectively, according to Counterpoint Research.
The best-performing smartphone brands in the first six weeks were Huawei and its subsidiary Honor, which spun off the tech giant in 2020 as a result of US sanctions.
Huawei's smartphone unit shipments rose 64% year-on-year in the first six weeks of 2024, according to Counterpoint Research. Meanwhile, Honor phone shipments rose 2%.
Apple faces a difficult environment in its main market, China. There are several notable trends adding to the pressures, not the least of which is intense competition from local Chinese smartphone makers – including the rising powerhouse Huawei.
Last year, Huawei launched a smartphone called Mate 60, which has 5G connectivity. This was a big surprise to the world, as the US government imposed several sanctions on Huawei in 2019 and 2020, cutting it off from key chips and technology needed for the fifth generation mobile Internet.
Huawei, once the world's largest smartphone operator by sales volume, is Apple's only major competitor in China when it comes to high-end devices. Customers flocked to iPhones, once Huawei's phones lost competitiveness due to the lack of 5G networks and the lack of cutting-edge semiconductors.
Huawei is seeing early signs of recovery with the Mate 60.
“Huawei is back in an attempt to win back iPhone defectors from a couple of years ago,” Neil Shah, an analyst at Counterpoint Research, told CNBC.
“There is some erosion for Apple, but more importantly other non-Apple brands in the premium segment are also feeling the pressure from Huawei.”
“Apple also had abnormally higher ‘sales’ in January 2023 versus 2024 as supply shifted to January after the Chinese factory disaster in Q4 2022,” Shah added.
Apple's supply chain saw major disruptions in late 2022 due to coronavirus lockdowns in China.
— CNBC's Arjun Kharpal contributed to this report