Chinese smartphone sales took a hit in the first six weeks of 2024, with a decline of 7% compared to the same period last year. This drop in sales can be attributed to the lackluster response to Apple’s newly launched iPhone 15. Counterpoint Research has revealed that customers in China showed little interest in the latest iPhone model and instead turned towards Huawei devices.
The underwhelming performance of Apple’s iPhone 15 had a direct impact on the company’s sales, which fell by 24% during the first six weeks of 2024. Chinese consumers opted to hold onto their older-generation iPhones, as they felt that the newer model did not offer significant upgrades. Mengmeng Zhang, a senior analyst at Counterpoint Research, acknowledged that although the iPhone 15 is a great device, it failed to entice customers due to the lack of notable improvements.
This drop in sales has had a negative effect on Apple’s stock, with shares falling by 3% after a 14% rise in the previous 12 months. The disappointing performance of the iPhone 15 has highlighted the need for Apple to innovate and introduce compelling features in its future models to regain consumer interest.
On the other hand, Chinese manufacturer Huawei experienced a surge in unit sales, with a 64% year-on-year increase in the first six weeks of 2024. This success can be attributed to the strong demand for its high-end smartphone, the Mate 60, which was launched in August 2023. Priced at ¥6,999, this device has been well-received by Chinese consumers and has managed to overshadow Apple’s iPhone 15.
While Huawei thrived, other major smartphone manufacturers saw a decline in their unit sales volumes. Oppo, in particular, experienced a sharp drop of 29% in its sales volumes. This decline can be attributed to aggressive pricing strategies adopted by lower-cost rivals such as Viva and Xiaomi, who aimed to boost their own dwindling sales. Apple also faced tough competition from these lower-cost rivals, impacting its sales negatively.
The decline in smartphone sales in China is reflective of broader issues in the Chinese economy, particularly the crisis in the real estate sector. This crisis has had a negative impact on consumer confidence, making individuals more cautious with their spending. Counterpoint Research predicts that smartphone sales will remain lower than last year in the first quarter of 2024. For the market to stabilize, there needs to be an improvement in consumer confidence.
Overall, Apple’s iPhone 15 failed to impress Chinese customers, leading to a decline in both smartphone sales and the company’s stock. Huawei emerged as the frontrunner, experiencing a significant increase in unit sales. While Apple faced competition from lower-cost rivals, the decline in smartphone sales also reflects the wider economic issues plaguing China. The coming months will be crucial for Apple as it seeks to regain its footing in the Chinese market by introducing innovative features and addressing consumer concerns.
