Chinese iPhone Sales Drop in Q3 as Huawei Rises: Market Insights
Chinese iPhone Sales Drop in Q3 as Huawei Rises
China's Smartphone Market Growth
The International Data Corporation (IDC) released a report on Friday morning indicating a 3.2% year-over-year increase in China's smartphone shipments to 68.8 million units in Q3 2024. This marks the fourth consecutive quarter of growth. Nevertheless, the report reveals more than just the overall growth.
Apple's Position in the Market
On a positive note for Apple, the tech giant has re-entered the top five smartphone companies, securing the second place with the launch of its new iPhone 16 series. The initial sales figures are consistent with its predecessor, and the company expects that upcoming promotions and the anticipated launch of Apple Intelligence will stimulate future demand.
Apple's Market Share Decline
On the other hand, the report reveals less encouraging news. It confirms a previous note on the lackluster performance of Apple Intelligence in the world's largest handset market. IDC data shows that Apple's market share in China fell to 15.6% in the quarter, a drop from 16.1% in the same quarter the previous year. This suggests that local brands, such as Huawei, are gradually eroding the global smartphone empire of CEO Tim Cook.
Huawei's Market Share
In terms of market share, Huawei is third behind Apple, holding approximately 15.3% of the country's market share. The local brand's smartphone shipments in the country soared by 42% year-on-year in the quarter, intensifying its competition with Apple.
Huawei's Comeback
"Huawei has made a remarkable comeback, marking four consecutive quarters of at least double-digit growth. The launch of the world's first tri-foldable phone is expected to further stimulate the development of the foldable market," IDC noted in the report.
Pressure on Apple
Huawei's resurgence is putting pressure on Apple in China and other international markets. With the absence of Apple Intelligence in China, consumers are likely to shift towards Oppo, Huawei, and Honor handsets, which already come with AI features.
Apple's Declining Shipments
In a separate report released earlier today by Canalys, Apple's China shipments in the third quarter decreased by 6% year over year compared to the same quarter one year ago. Canalys ranked Apple fifth in terms of market share and indicated that Huawei had the second largest market share, with smartphone shipments in the quarter rising by 24% year over year.
Apple Intelligence's Impact
The key takeaway is that Apple Intelligence did not trigger what many Wall Street analysts believed would be an upgrade 'supercycle' for the world's most valuable company. Apple's market capitalization stands at $3.5 trillion.
Weak Demand for Apple Vision Pro
Meanwhile, a new report suggests that weak demand for the Apple Vision Pro mixed-reality headset in US markets could lead to a reduction in series production as early as next month.
Apple's Pricing Strategy
Perhaps Apple's problem lies in its high pricing strategy for its products during a period of high inflation and interest rates.
Bottom Line
It's interesting to see the dynamics of the smartphone market in China, with local brands like Huawei giving stiff competition to global giants like Apple. The decline in Apple's market share and the rise of Huawei certainly raise questions about the future of these companies in the Chinese market. What are your thoughts on this? Feel free to share this article with your friends. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.