Apple iPhone faces tough competition from Huawei and other local rivals in China

Data from research firm IDC on Thursday showed that Apple’s smartphone shipments in China fell 2.1% in the final quarter of 2023 from the same year earlier due to increased competition from local rivals led by Huawei.

The decline underscores the challenges the U.S. company faces in its third-largest market, as some Chinese companies and government agencies limit the use of Apple devices by employees, a measure that restricts access to Chinese apps on security grounds. Reflects US government sanctions.

Huawei, whose smartphone business was decimated by US sanctions, also bounced back with new launches last year, intensifying competition in the world’s largest smartphone market, which grew just 1.2% in the last quarter of 2023.

IDC data shows that Huawei’s shipments increased by 36.2% in the last quarter of the year. The company became the fourth-largest smartphone vendor in China during the period with 13.9% market share, up from 10.3% in the same quarter a year ago.

However, according to IDC, for the full year 2023, Apple overtakes Vivo to become the top smartphone vendor with 17.3% market share. This is the first time Apple has become the top seller in China, but analysts predict its sales will come under pressure again this year.

IDC said that Apple’s high-end market share in China has been affected by rival products and limited product upgrades by Apple, reducing the overall attractiveness of the iPhone.

It added that Apple still attracts demand from many consumers through substantial discounts and promotions carried out through third-party distribution channels.

Earlier this month, Apple offered a rare discount on its iPhones amid growing competitive pressure, cutting retail prices by up to 500 yuan ($70).

Jefferies analysts predicted earlier this month that Apple’s shipment volumes will continue to decline by double digits in 2024, while Huawei is seen increasing its market share.

They estimate Huawei will ship about 64 million smartphones worldwide in 2024, a significant increase from the fewer than 35 million units projected for 2023.

Overall, shipment volume in China’s smartphone market in the fourth quarter was 73.63 million units. For the full year, shipment volumes were down 5% to 271 million units, IDC said.

Apple will release its quarterly results next week.

(This story has not been edited by News18 staff and is published from a syndicated news agency feed – Reuters)