Apple Inc.'s latest flagship device, the iPhone 15, is experiencing disappointing sales in China compared to its predecessor, according to separate analyses. Market tracker Counterpoint Research estimates that sales of the iPhone 15 are down 4.5% compared to the iPhone 14 during the first 17 days of release, while Jefferies analysts suggest that the sales decline is in double digits. This decline in sales reflects both sluggish consumer demand and the increasing competition from Chinese rival Huawei Technologies Co.
The weak performance of the iPhone 15 in China is concerning for Apple, as it comes at a time when smartphone demand is at its lowest point in a decade and the company continues to face backlash due to overheating issues. If these initial estimates are accurate, it could mark one of the iPhone's worst debuts in China since 2018, when local brands like Oppo and Vivo started gaining popularity among Asian consumers.
Counterpoint Research attributes the decline in iPhone sales in China primarily to an economy that is struggling to recover from the impact of the Covid-19 pandemic. The research firm also highlights that in the United States, the iPhone 15 likely recorded a double-digit increase in sales during the first nine days of its release.
However, the iPhone 15's debut in China coincided with the launch of Huawei's Mate 60 Pro, which surpassed Apple's overall sales. The Mate 60 Pro garnered attention for offering an advanced made-in-China processor, seen as a triumph over the US sanctions imposed on Huawei. Additionally, the Chinese government implemented a ban on iPhone use by government agencies and state companies, further complicating Apple's challenges in the country.
Counterpoint's research director, Jeff Fieldhack, acknowledges that the US market has been performing well for the new iPhone, with consecutive strong weekends. This positive sentiment from the largest iPhone market globally helps alleviate some of the concerns over the sales figures in China.
Industry analysts remain divided on the long-term implications of these sales figures for Apple in China, which is the world's largest smartphone market. Many believe that Huawei's growing prominence could chip away at Apple's dominance in the higher-end segment of the market.
Counterpoint Research estimates that Huawei could sell 5 to 6 million units of the Mate 60 Pro alone this year, with projections suggesting that it could reach double digits by 2024. As a result, Huawei has overtaken Apple to become the market leader in China, according to Jefferies analysts.
The analysts from Jefferies also state, "The trend suggests iPhone would lose to Huawei in 2024. We believe weak demand in China would eventually lead to lower-than-expected global shipments of iPhone."
Apple's shares declined by 0.8% following the release of these reports. The company will need to devise strategies to navigate the challenging market landscape in China and reaffirm its position in the global smartphone industry.