Apple Inc’s latest iPhone, the iPhone 15 series, is facing challenges in China as it falls short of its predecessor’s performance. Market research data from GfK shows a 6% decline in sales compared to the prior year, while IDC estimates a 4% drop in shipments for the third quarter. This decline is attributed to Huawei Technologies Co’s strong return to the mobile arena, with their Mate 60 series recording close to 1.5 million sales in its launch month, more than double compared to a year ago. GfK highlights the strong growth of Huawei as a major factor contributing to the decline in iPhone 15 series sales.
Huawei’s Mate 60 and 60 Pro smartphones were unexpectedly released just before the latest iPhone’s launch. The smartphones garnered attention with their Kirin processor, which is made in China and seen as a breakthrough in Huawei’s efforts to overcome US trade sanctions. Counterpoint Research and Jefferies analysts predict a double-digit percentage decline for Apple in China, citing economic challenges impacting consumer demand. Although Apple upgraded several key features in the iPhone 15 lineup, the company has not been able to drive growth in the world’s largest mobile market.
China is a significant market for Apple, accounting for about 20% of its revenue, second only to the US. Additionally, the majority of iPhones are manufactured in China, primarily by Foxconn Technology Group. However, rising tensions between the US and China have put Apple in a vulnerable position. China has expanded its ban on the use of iPhones in certain government-backed agencies and state-owned enterprises. The company has been exploring ways to reduce its reliance on Chinese manufacturing by expanding production into India and Southeast Asia, although the long-term impact remains uncertain.
In the latest IDC report, local brands Honor Device Co and Oppo secured the top two spots in the Chinese market during the past quarter. Honor, which separated from Huawei in 2020, introduced several foldable models targeting the segment of the smartphone market that continues to experience robust growth.
Overall, Apple’s iPhone 15 series is struggling to gain traction in China due to the strong competition from Huawei and economic challenges affecting consumer demand. The company’s reliance on the Chinese market and manufacturing facilities has also put it in a vulnerable position amidst rising tensions between the US and China.
Sources:
• Bloomberg – Apple’s iPhone 15 sales in China fall short of previous model
• GfK – GfK
• IDC – IDC
