Apple Faces Headwinds In China: iPhone Sales Down As Huawei Thrives

Apple Inc. AAPL has been witnessing a slump in sales of its latest iPhone series in China, a critical overseas market, as local competitor Huawei Technologies Co. stages a comeback.

What Happened: As per a Bloomberg report, GfK and IDC research data show a fall of up to 6% in iPhone sales in China during the iPhone 15 series launch month compared to the same period last year. 

The researchers highlight Huawei’s return to prominence in the mobile sector as a significant factor.

Huawei’s Mate 60 series registered close to 1.5 million sales during its launch month, more than doubling from last year, despite supply limitations. 

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Cupertino, which derives around 20% of its revenue from China, is also dealing with escalating U.S.-China tensions. The Chinese government is extending an iPhone prohibition in some departments of government-backed agencies and state-owned enterprises.

Simultaneously, Apple is contemplating decreasing its dependence on Chinese manufacturing by increasing production in India and Southeast Asia. 

However, these strategies could bear uncertain long-term consequences.

Why It Matters: Huawei’s recent surge in the Chinese smartphone market is adding pressure on Apple. 

Previously, it was reported that the release of a smartphone equipped with a leading-edge chip has bolstered Huawei’s position, pushing it closer to the top five smartphone brands in the country. Huawei aims to double its smartphone sales in 2024, targeting 60 to 70 million units.

Moreover, despite looming U.S. restrictions, Huawei plans to double its smartphone sales. The company has accumulated essential components, including lenses, cameras, and circuit boards, to meet this ambitious goal.

Meanwhile, iPhone 15 sales in China saw a 4.5% dip in the first 17 days compared to its predecessor. However, China’s vice premier, Ding Duexiang, signaled China’s readiness to provide Apple with “more opportunities” as competition with Huawei intensifies and governmental oversight increases.

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