Apple's iPhone Sales in China Plummet 19% in Q1 2024 Amid Huawei's Resurgence

Apple's iPhone sales in China suffered a significant blow in the first quarter of 2024, dropping by 19.1% year-over-year, marking the company's worst performance in the region since 2020. The decline pushed Apple's market share down to 15.7%, nearly neck-and-neck with Chinese tech giant Huawei, whose sales surged by 70% during the same period.

Analysts attribute Apple's struggles to the resurgent Huawei, particularly in the premium smartphone segment, with Huawei's recent launches, such as the 5G-capable Mate 60 series, effectively challenging Apple's dominance in the high-end market. Counterpoint analyst Ivan Lam noted that "Huawei's comeback has directly impacted Apple in the premium segment, and the replacement need for Apple has been slightly subdued compared to previous years."

Despite the overall growth in China's smartphone market, which saw a 1.5% year-over-year increase and a 4.6% quarter-over-quarter increase, Apple slipped to the third spot behind domestic brands Vivo and Honor. The Chinese New Year festivities, a period of high consumption, drove a 20% increase in weekly sales for domestic brands compared to a normal week, further contributing to Apple's lost ground.

Why this matters: Apple's declining iPhone sales in China underscore the increasing competition from domestic Chinese brands and the shifting consumer preferences in the world's largest smartphone market. As Apple faces challenges in maintaining its dominance, the company's future growth strategies and ability to adapt to the evolving market dynamics will be closely watched by investors and industry analysts alike.

However, there are signs of hope for Apple, with Counterpoint Research seeing evidence of a slow but steady improvement in iPhone sales in the following weeks. The possibility of new color options and aggressive sales initiatives in the second quarter could potentially lead to a return to positive territory for the American tech giant. Apple CEO Tim Cook also recently visited Southeast Asian countries like Singapore, Vietnam, and Indonesia, hinting at the company's efforts to diversify its manufacturing and market presence beyond China.

Key Takeaways

• Apple's iPhone sales in China dropped 19.1% YoY in Q1 2024, its worst since 2020.
• Huawei's sales surged 70% in the same period, challenging Apple's premium segment dominance.
• Apple slipped to 3rd spot in China's smartphone market behind Vivo and Honor.
• Domestic brands saw 20% weekly sales increase during Chinese New Year, further hurting Apple.
• Apple sees signs of slow improvement, plans new initiatives, and diversifies beyond China.