According to reports, Apple is facing challenging times in its largest overseas market, China.
In February this year, the tech giant shipped around 2.4 million iPhones in China, marking a 33% decline compared to the previous year, continuing the downward trend in shipments that began earlier this year. In January, Apple's shipments in China were estimated at 5.5 million units, a 39% year-on-year decrease.
Although the situation in February wasn't as dire as January, it still fell short of previous expectations.
Counterpoint Research's report released in early March estimated that iPhone sales in China dropped by 24% in the first six weeks of this year. However, the actual decline rate was faster than what was projected in the report, sparking concerns among investors about Apple's sales performance in the Chinese market. Perhaps influenced by this data, Apple's stock fell by 0.7% on Tuesday, March 26th, bringing the total decline for Apple to about 12% year-to-date.
Tech analyst Dan Ives of Wedbush recently stated in a report that "Apple has had a very tough period in China."
Slowing Trends One of the issues Apple faces in China is fierce competition from Huawei. According to Counterpoint data, Huawei has overtaken the iPhone to become the top-selling smartphone in China.
Nicole Peng, an analyst at Canalys, mentioned, "Apple's retail channels in China are still digesting the shipments from the fourth quarter of 2023, which may be a reason for the decline in shipments in recent months, signaling a slowdown in Apple's sales in China in the coming months."
In the latest quarterly earnings report ending December 2023, the company's sales in the Greater China region dropped to $20.8 billion, a 13% year-on-year decrease.
Edison Lee, an analyst at Jefferies, stated in a report this week that they expect iPhone sales to decline by over 20% this year, leading the overall market downturn.
Apart from headwinds in the Greater China region, Apple faces multiple challenges in 2024, including nearly $2 billion in antitrust fines from the EU, antitrust lawsuits from the US Department of Justice, rapid advancements in artificial intelligence technology, and the decision to terminate its self-driving car project.
There is currently significant attention on Apple's next moves, perhaps expecting some new information from the Worldwide Developers Conference (WWDC24) scheduled for June. Apple announced on its official website that WWDC24 will be held online from June 10 to 14, 2024, focusing on the latest developments in iOS, iPadOS, macOS, watchOS, tvOS, and VisionOS.
Meanwhile, Apple's top executives seem to be trying to regain ground in China. Apple CEO Tim Cook visited China this month, touring the latest flagship store in Shanghai and attending the China Development Forum in Beijing.
Ives noted, "The timing of (Cook's) trip is crucial, fundamentally, Apple needs China."
