The decline in iPhone sales in China’s billion-dollar market is forecast to continue in the context that the country’s telecommunications giant Huawei has just launched a new phone line.
“charm attack”
A highlight reel of Apple CEO Tim Cook’s recent trip to China was posted to his Weibo account, showing him being applauded by fans as he opened a new Apple store in Jing’an district, Shanghai. He happily took iPhone selfies with famous models and strolled the historic Bund.
“Every time I come to China, I feel the unique charm here. Thank you very much for the warm welcome!”, Mr. Cook wrote in a post on social networks.
However, the Apple CEO was actually facing a major dilemma in China at the time he posted the video last month: iPhone sales had dropped an alarming 24% in six weeks. early in the year, according to data from Counterpoint Research.
And despite the “charm attack” from Mr. Cook, Apple is still facing the risk of revenue continuing to decline sharply in the near future, especially when Huawei recently continued to launch new smartphone lines. named Pura 70.
According to the announcement, the new phone line starts at $760, and is equipped with an advanced new camera system that looks similar to the trio of lenses on the back of the iPhone Pro models.
More importantly, the new phones give Huawei a new opportunity to take a larger share of Apple’s share of the Chinese smartphone market. It has won the hearts of several consumers since the launch of the Mate 60 Pro series last year.
The “rise” of Huawei
The Mate 60 raised some concerns in the US last year after it was discovered that they were equipped with advanced chips that Washington has sought to prevent China from obtaining by imposing sanctions. strict export control measures.
Huawei launched a new smartphone line called Pura 70.
Those chips are produced domestically and have helped Huawei make huge profits in China by enabling features that compete with those found on the iPhone. Now, experts believe they are also present in the new Pura 70 devices.
Counterpoint estimates Huawei’s smartphone sales increased 64% in the first six weeks of the year. Pura 70 could continue to consolidate that upward momentum in the near future.
Sharing with Reuters, Mr. Ivan Lam, senior analyst at Counterpoint, predicted Huawei could nearly double the number of phones shipped this year to 60 million units.
Of course, this is not what Apple wants. China has been Apple’s most important international market for many years, but it is threatened by the rise of domestic rivals that could entice Chinese consumers with devices with new interfaces. Almost like an iPhone.
Apple has exposed its weakness in the face of domestic competition in China. Net sales in the Greater China region were $20.8 billion in the last three months of last year, down from $23.9 billion in the same period in 2022.
Wedbush analysts wrote last week that Apple is “navigating one of the more difficult demand environments in China that we have seen in the past five years.” They predicted a decline in iPhone sales in the region in Apple’s quarterly earnings report on May 2.