Apple’s trouble in China: Tech giants’ sales plummet by 24%, Huawei up by over 64%

Chinese citizens are abandoning American consumer tech companies, and Apple is bearing the brunt of it.  Consumers in China are increasingly turning to domestic smartphone brands amidst escalating tensions with Western companies, particularly evident in the smartphone market.

According to a recent report from Counterpoint Research, Apple's iPhone sales in China plummeted by 24per cent during the first six weeks of 2024, while Huawei, a leading Chinese tech giant, experienced a significant 64per cent surge in sales over the same period.

Counterpoint's senior analyst Mengmeng Zhang attributes Apple's struggles to stiff competition from Huawei, which has seen a resurgence in demand for its high-end products.

Huawei's success can be attributed to the release of its Mate 60 phone series, featuring more Chinese-made components and a locally manufactured chip. This phone has enticed many Huawei users to upgrade, while Apple's latest iPhone 15 lacks significant upgrades compared to previous models, leading consumers to hold onto their older iPhones for longer.

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The increasing competition poses a significant challenge for Apple, as China remains a crucial market, accounting for a substantial portion of the company's global revenues. Last year, Apple's iPhone sales in China reached $20.8 billion, representing a sizable portion of its total phone sales.

However, Apple's market share in China has declined to 15.7 per cent, down from 19 per cent the previous year, making it the fourth most-sold phone in the country, compared to second place in 2023.

Following the news of its sales struggles, Apple's stock took a hit, dropping over 2.5 per cent by midday. Weak iPhone demand, a lack of AI development compared to competitors, the decision to abandon its EV plans, and antitrust concerns have contributed to investor concerns about Apple's prospects.

Despite the short-term challenges, analysts like Dan Ives from Wedbush remain bullish on Apple's long-term outlook. Ives predicts a surge in demand for smartphone upgrades, leading to 270 million unit sales for the iPhone 16. Additionally, he believes Apple will eventually compete in the AI space and overcome the current challenges, leading to brighter days ahead for the company.

(With inputs from agencies)