In February, Apple Inc (NASDAQ:AAPL). experienced a significant 33% drop in iPhone shipments in China, continuing a downward trend in its most crucial international market, per data from the China Academy of Information and Communications Technology.
This decrease comes on the heels of a 39% reduction in January, with about 5.5 million units shipped, underlining a challenging start to the year for Apple in the vast Chinese market.
This slump in demand was partly influenced by the Lunar New Year’s timing, affecting the overall shipment figures, which totaled just 2.4 million smartphones for all foreign brands in February.
For Apple, which holds the lion’s share among these, the impact is significant, especially as the company faces renewed competition from Huawei Technologies Co. The Chinese tech giant has made a comeback in the premium segment, directly challenging Apple’s dominance.
“Apple’s retail channels in China are still digesting the shipment from the fourth quarter of 2023, that could explain the drop in recent months,” said analysts from Canalys.
“But it’s a sign of a slowing trend for the upcoming months for Apple in China, especially when the Chinese peers are driving very aggressively the AI smartphone messages.,” they added.
The broader Chinese smartphone market has also seen a contraction, nearly one-third in February alone, reflecting a general hesitation among consumers to invest in non-essential goods.
Despite this, analysts forecast some growth through the year but remain pessimistic about Apple’s prospects.
According to a note from Jefferies analysts, the iPhone is expected to lead market declines, with a projection of over 20% for the year so far.
