Apple iPhone Sales in China Drop as Foreign Phone Sales in the Asian Country Decline
The number of foreign phone brands sold in China dropped significantly for the fourth month. Apple’s iPhone sales dropped by 47.4% in November 2024 compared to the same period the previous year. According to CNBC, China’s phone sales decline reflects the growing pressure on Apple.
Shift to Domestic Brands
Data from China’s Academy of Information and Communications Technology (CAICT) shows a drop in November foreign brand sales, from 5.769 million units in 2023 to 3.04 million units in 2024. The decline comes soon after the 44.25% drop recorded in China’s mobile market in October 2024.
Apple accounts for the biggest share of foreign smartphones in China. Other competitors such as Samsung constitute a small section of the market. China’s foreign phone sales expose the impact of domestic brands like Huawei.
Last year, Huawei aggressively launched a range of high-end smartphones in the Chinese market. Its new products are increasingly becoming popular among Chinese buyers. In the US, Huawei’s smartphone sales were crippled by government sanctions back in 2021.
Fierce Competition
Apple sales decline in the Chinese market is largely due to the fierce competition it’s currently facing from domestic players like Huawei. The company’s performance has also been affected by the slowing economy. Consumer prices in China dipped significantly in November 2024 and were at their lowest in five months. The drop was triggered by deflation concerns and economic uncertainty that affected household spending.
In a bid to boost domestic sales and expand its market share, Huawei announced discounts of up to $411 on several high-end smartphones, watches, headphones, and tablets last week. Apple reacted to this move by launching a rare 4-day promotion with price cuts of up to $68.50 dollars on its top models to boost sales.
Huawei is one of the strongest Apple rivals since its 2023 resurgence with locally-manufactured premium chipsets. Apple fell out with its top five Chinese smartphone vendors in quarter 2 of 2024. This fallout led to a 0.3% Apple sales drop in China in quarter three sales. Huawei’s sales grew by 42% in the same period.
Counting on Apple AI
Apple is counting on its iPhone 16 series to regain its momentum in the Chinese smartphone market. The US big tech unveiled iPhone 16 in September 2024 with the promise that it will provide users with a range of AI features through Apple Intelligence.
But Apple AI is still not accessible to Chinese users due to the complicated AI regulations in the country. However, rival smartphone makers have been marketing their own AI features. Apple has reportedly commenced discussions with Tencent and TikTok’s mother company Bytedance about integrating AI models in iPhones sold in China.
Apple considers these partnerships as critical in navigating the competitive Chinese market. Over the last few months, the US big tech has been experiencing a range of challenges in the Asian country, including crackdown on its app store fees. In August 2024, Apple intensified its efforts to convince ByteDance and Tencent to seal loopholes that enabled in-app developers to bypass its 30% commission.
Apple CEO Tim Cook visited China several times in 2024 to boost partnerships with domestic smartphone companies. In October 2024, Cook met with Chinese officials in Beijing to discuss rising competition in China and Apple Intelligence rollout.
