Apple iPhones sales fall 24% in China amid competition and headwinds

iPhone sales dropped 24% in the first six weeks of 2024, according to a new report, adding to significant problems for Apple and other Western tech companies in a crucial market.

Analysts from Counterpoint Research said the overall mobile market in China fell by 7% with companies including Apple, Oppo and Vivo experiencing declines.

But the problem for Apple has been ongoing for a year as China’s economy slows down, and trade tensions and nationalism heat up. Customers that once would have considered Apple are now turning to national brands, particularly Huawei, Counterpoint said.

“Primarily, [Apple] faced stiff competition at the high end from a resurgent Huawei while getting squeezed in the middle on aggressive pricing from the likes of Oppo, Vivo and Xiaomi,” Mengmeng Zhang, a Counterpoint senior analyst, said in a press release. “Although the iPhone 15 is a great device, it has no significant upgrades from the previous version, so consumers feel fine holding on to the older-generation iPhones for now.”

Apple shares slid 2.8% on Tuesday. The stock has fallen about 11.6% this year on concerns about weakening sales, particularly in China.

The company did not respond to a request for comment.

The report comes amid a floundering Chinese economy, a struggling housing market, higher unemployment of younger workers and more competition among higher-end vendors in China, particularly from Chinese device manufacturer Huawei.

China remains a very important market for Apple as it is the largest market behind the US. Apple previously made a lot of gains during its launch period last year. The company continues to offer discounts to help ameliorate some of the downturn.

Last year, Huawei’s Mate 60 made headlines when the US government sought more information about the Pro model which included a sophisticated processor. Its debut shocked industry experts who questioned how the company could make such a chip following sweeping efforts by the United States to restrict China’s access to foreign chip technology because of perceived national security concerns.

Now, some Chinese consumers think they’ve been wronged by the US government sanctions and are gravitating toward Huawei’s Mate 60 smartphone, which is edging into Apple volumes.

Jeff Fieldhack, a research director with Counterpoint, told CNN part of the issue is that Apple had a strong January last year due to part shortages, but didn’t experience shortages in January this year.

“This isn’t a major deal for Apple in the long term,” he said. “It is still a successful iPhone launch and there is more discounting and marketing they can do this year in China to help alleviate the competition from Huawei.”

Huawei in January represented 17% of the mobile market share in China, compared to Apple’s 16% share. Huawei demand is higher than its supply, which means it could in theory be selling more, Fieldhack added.

“Apple, to its credit, ended the year at number one, which was extraordinary despite headwinds from China,” he said.

CNN’s Krystal Hur contributed to this report