Despite the iPhone 16e selling more than 60% of SE units, IDC predicts that Apple's (AAPL.US) sales in China will still decline by 2%.

Market research firm IDC stated that Apple's (AAPL.US) latest iPhone 16e has already surpassed the initial sales of the third-generation iPhone SE, released several years ago, but the growth is not enough to reverse Apple's decline in China. The firm estimates that the iPhone 16e sold 60% more in its first three days than the iPhone SE launched in 2022, but this did not change its prediction that Apple's overall sales in China will decline by about 2% this year. IDC senior director Nabila Popal analyzed: "The competition from the Android camp will become more intense, and the government's subsidy policy will benefit Android brands much more than Apple." The iPhone 16e, priced at $599, replaces the original iPhone SE, priced at $429, making it harder for Apple to resist the challenge of cheap Android phones. The device only has one rear camera, limited basic storage, and incomplete AI functions, making its sales in the region more difficult. In addition, the Chinese government has allocated RMB300bn (US$41bn) to subsidize the consumption economy, and these subsidies have recently expanded to the smartphone sector, helping brands such as Xiaomi and Vivo expand their sales. Apple is reportedly working to bring its Apple Intelligence suite to Chinese consumers as early as this year's mid-year. Despite this, Apple may still be able to make up for its sales weakness in the region through other models. "Note that these models may only account for a small portion of Apple's sales, as many Chinese consumers care about 'face', and do not want to be seen as owning a low-priced iPhone," said Bryan Ma of IDC. In overseas markets, the iPhone 16e is expected to account for one-fifth of iPhone sales in India this year. Apple reported that sales in China fell about 11% during the holiday period, and the iPhone may have been a major factor. The company expects overall revenue to grow slightly this quarter.