Apple's Market Share In China May Dip Further This Year, According To Jefferies

Analysts at Jefferies indicate that Apple's iPhone sales decline in China is exacerbating, and sales may further plummet this year.

In a report on Sunday, analysts led by Edison Lee at Jefferies cited industry surveys stating that Apple's latest generation iPhone had a notably lackluster start in China last year, with the recent year-on-year decline widening to 30%.

Meanwhile, other Chinese smartphone brands have witnessed sales growth, with Huawei recording the fastest growth rate owing to its Mate 60 new product line.

In fact, Apple managed to benefit from increasing its market share in China after Huawei was hit by American sanctions in 2020, resulting in its disconnection from leading global chipmakers like the Taiwan Semiconductor Manufacturing Co.

However, in recent years, the electronics company based in Shenzhen is regaining its competitiveness in the mobile market by developing its products, even including focusing on building its own software ecosystem to rival Apple's iOS and Alphabet Inc.'s Android.

Ahead of the iPhone 15's launch in September last year, Huawei initially introduced Mate 60 Pro, recapturing part of the clientele that was previously snagged by Apple. Jefferies estimates that Huawei's smartphone shipments in 2023 were 35 million units, unable to further augment mainly due to certain supply restrictions.

Apple iPhone sales witnessed a double-digit decline in December last year, and Jefferies expects a similar decline in sales this year.

Last week, major online shopping portals increased discounts on the Apple smartphone series, lowering the average selling price without stimulating sales growth. Moreover, the ongoing global chip shortage that has been affecting many industries, including the smartphone sector, could potentially be hampering Apple's capabilities.

It might also be a contributing factor to the decline in sales as production rates struggle to meet demands. Additionally, the competition in China's smartphone market has become increasingly fierce, with many local brands offering high-quality phones with more affordable price tags, which could further complicate Apple's position in the market. The company could be facing a challenging year ahead if these conditions persist.

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