Demand continues to rebound as Apple's (AAPL.US) iPhone 16 sales in China soar 20% in the first three weeks of its launch

Apple's latest iPhone has seen a 20% increase in sales in the first three weeks of its launch in China, a positive sign for the device that has struggled to gain attention in the world's largest smartphone market this year. The iPhone 16, which debuted in September, has so far outperformed its predecessor, the iPhone 15, in China, according to Counterpoint Research. Consumers continue to favour the more expensive high-end models, with sales of the Pro and Pro Max models up 44% year-on-year. While only three weeks of sales, the data suggests that Apple's new products this year are performing better than last year. Ivan Lam, an analyst at Counterpoint, said production issues early on had held back the iPhone 15 series, which may have limited initial sales. Apple's flagship devices are also facing a tough challenge from the Huawei Mate 60 series, which has won over Chinese consumers with its homegrown chips. Lam said the Mate 60 series is still selling well. "Leveraging steady production, consistent pricing strategy, and the first upgrade wave from existing iPhone users, the iPhone 16 series has experienced significant growth in the domestic Chinese market. The product portfolio has also been significantly improved," Lam said. This week, Apple's shares hit a record high, buoyed by optimism about the AI-driven iPhone. Analysts had warned that the iPhone 16's performance in China could be poor, given the lack of local partners to support AI features. While off to a good start, the iPhone 16 will still face many local competitors this year. Vivo has just announced its new X200 Pro flagship, Huawei is expected to launch its next-generation Mate series in November, and Oppo and others will update their product lines by the end of the year. China remains the world's largest smartphone market, and Cook estimates it is also the most competitive. For Apple, the iPhone remains the most important product to date, contributing directly about half of sales and attracting consumers to buy accessories such as the Apple Watch or subscription services such as Apple Music. But the smartphone market has stagnated for years, and the latest generation of smartphones will need to be watched throughout the sales process.