Apple is facing challenges in the Chinese smartphone market, with iPhone sales down 24% year-over-year in the first six weeks of the year, according to a report from research firm Counterpoint. The drop has been attributed to stiff competition, particularly from Huawei, whose smartphone sales surged 64% over the same period.
Counterpoint senior analyst Mengmeng Zhang stated that Apple faced competition at the high end from Huawei and pricing pressure from other Chinese brands like OPPO, vivo, and Xiaomi. Zhang also noted that while the iPhone 15 is a great device, it lacks significant upgrades from the previous version, causing consumers to hold onto older-generation iPhones.
Shares of Apple have declined 3% and lost about 10% of their value so far this year, underperforming other big tech peers in the United States. Apple's share of the Chinese smartphone market has dropped to 15.7% from second place a year ago, now placing it in fourth.
Despite the challenges in China, Apple beat Wall Street estimates on sales and profits last quarter, driven by strong iPhone sales worldwide. CEO Tim Cook acknowledged the competitive nature of the Chinese smartphone market, but highlighted strong double-digit growth in emerging markets outside of China.
Overall, Apple is facing tough competition in China, with Huawei leading the way in sales growth. While Apple's performance in the Chinese market has declined, it continues to see success in other markets around the world. The company remains optimistic about the future of its iPhone business, despite the challenges it faces in China.