Apple is reportedly in danger of losing significant ground to Chinese smartphone maker Huawei.
Sales of the company’s iPhone in China fell by 30% for the first week of the year, Reuters reported Monday (Jan. 8), citing a note by Jefferies analysts.
According to the report, the drop in Apple’s sales was the chief driver for nationwide, double-digit decline in smartphone shipments in China last week. This decrease happened in spite of robust markdowns on several iPhone models on major marketplaces in China.
The Jefferies note says the 30% plunge marks an acceleration from the 3% year-over-year dip Apple saw for all of 2023 in China. The analysts argue that Apple will face more pressure from rivals throughout 2024, projecting that the company’s shipment volumes will continue dropping by double digits in 2024, while Huawei expands its market share.
The news comes less than a week after analysts at Barclays forecast continued weak demand for the iPhone, causing the company’s stock to drop and wiping out more than $107 billion in market value.
“We expect reversion after a year when most quarters were missed and the stock outperformed,” the bank’s analysts wrote in a note. “Our checks remain negative on volumes and mix for iPhone 15, and we see no features or upgrades that are likely to make the iPhone 16 more compelling.”
Apple’s market value reached $3 trillion last year as investors hitched their fortunes to the idea that consumers would keep buying iPhones.
Since then, however, Apple has run into increased competition from rivals like Huawei, as well as a crackdown by China on iPhone use by government or state-owned company workers.
Recent data from investment firm KeyBanc Capital Markets showed iPhone sales running lower than historical trends, with stronger sales for the iPhone 15 Pro and Pro Max only partially offsetting weaker demand for the iPhone 15 and Plus.
It’s also been a tough few years for smartphones in general, as the industry went 27 months without seeing year-over-year growth, from June 2021 to October 2023, according to Counterpoint Research.
“Global smartphone sales have been under stress for the last two years due to factors including component shortages, inventory build-up and lengthening of replacement cycles,” Counterpoint said in a news release. “These issues have been compounded by an uncertain macroeconomic environment.”