Apple’s China sales fall 13% in December quarter amid weak iPhone demand, increased competition from Huawei

Apple’s China sales fall 13% in December quarter amid weak iPhone demand, increased competition from Huawei

02 Feb Apple’s China sales fall 13% in December quarter amid weak iPhone demand, increased competition from Huawei

Posted at 11:29h in Asia by

Apple reported a nearly 13 per cent drop in revenue from its Greater China region in the December quarter, a setback that chief executive Tim Cook shrugged off amid the US tech giant’s overall global growth and its steadfast confidence in the world’s biggest smartphone market over the long term.

The Cupertino, California-based company on Thursday said global revenue in the three months ended December 30 totalled US$119.6 billion, up 2 per cent from US$117.1 billion a year earlier, as sales rose in its other operating regions. This marked Apple’s first quarterly revenue growth in a year.

Revenue in Greater China – covering the mainland, Hong Kong, Macau and Taiwan – reached US$20.8 billion in the quarter, down from US$23.9 billion a year ago.
Cook indicated that iPhone sales in mainland China saw a “mid-single-digit” decline on a constant-currency basis, but expressed optimism about Apple’s long-term prospects in the world’s second-largest economy.
Shoppers are seen inside an Apple Store in Beijing on February 2, 2024. China remains a prized market for Apple, which generates roughly a fifth of its sales there. Photo: Bloomberg

“I remain very optimistic about China over the long term,” Cook said in a conference call with analysts after its earnings results announcement. “And I feel good about hitting a new install base number, a high water mark, and very good about the growth in upgraders year over year during the quarter.”

Mainland iPhone sales were estimated to be down 30 per cent year on year in the first week of January, according to a Jefferies research note published on January 7.

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“The main reason for the decline is the return of Huawei and the fact that foldable phones have gradually become the first choice for high-end users in the Chinese market,” said Kuo Ming-chi, a TF International Securities analyst known for his accurate assessment of Apple’s business, in a research note published on Tuesday.

Such a “structural challenge” on the mainland will lead to a significant decline of up to 15 per cent in global iPhone shipments in 2024, according to Kuo.

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Despite slow iPhone sales, Apple still topped mainland China’s smartphone market in the fourth quarter and the whole of last year, according to a report by tech research firm IDC.

The company seized the No 1 spot on the mainland for the first time last year with a record 17.3 per cent market share, even though its domestic shipments saw a modest decline of 2.2 per cent – a smaller decrease in shipments compared to its competitors.

“Apple achieved this thanks to timely price promotions in its third-party channels, which stimulated demand,” Arthur Guo, senior research analyst at IDC China’s client system research, wrote in the report.

Overall smartphone shipments in mainland China declined 5 per cent last year, compared to 2022, according to IDC data.

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