Chinese consumers go local as Apple sees a big drop in iPhone sales

apple china

Apple has had a rough quarter in China, according to a report by Counterpoint Research. Apple’s sales dropped 19.1% YoY in Q1 as Huawei’s comeback directly impacted the premium segment in China. This is reportedly the worst quarter for Apple since 2020. It is also significant because this was the ‘festive’ season in China — a quarter where iPhone sales are traditionally on the up.

According to Counterpoint Research’s senior analyst Mengmeng Zhang,Q1 2024 was the most competitive quarter ever, with only 3% points separating the top six players in terms of market share. Smartphone OEMs compete fiercely during the festive period, finalising various marketing and promotional strategies well in advance. “In particular, Chinese OEMs, with their ample cost-effective offerings, capitalise on the surge in sales in the low-end segment as migrant workers purchase more affordable, budget smartphones when returning home for the holiday,” Zhang said.

While Huawei may have grown 69% YoY, it was Vivo which emerged as the market leader in China with 17.5% market share. Huawei’s  sub-brand Honor ranked second with a 16.1% share, followed by Apple with a 15.7% share. According to Ivan Lam, senior research analyst, Counterpoint Research, Apple’s sales were subdued during the quarter as Huawei’s comeback has directly impacted Apple in the premium segment. “Besides, the replacement demand for Apple has been slightly subdued compared to previous years,” said Lam.
The analyst does predict Apple bouncing back. Apple is rumoured to launch new colour variant for iPhone in May. “For the second quarter, the possibility of new colour options combined with aggressive sales initiatives could bring the brand back into positive territory; and of course, we are waiting to see what its AI features will offer come WWDC in June. That has the potential to move the needle significantly longer term,” said Lam. China remains a key market for Apple both in terms of manufacturing as well as selling its products.

Also read: Samsung beats Apple to emerge the number one smartphone brand as iPhone sales decline