Apple's sales in China have been poor, with sales of its best-selling product, the iPhone, falling 24 percent year-on-year in the first six weeks of the year, and its market share falling to 15 percent from 19 percent last year7%, ranking fourth. Analysts believe that this is mainly due to Apple's lack of innovation, as well as fierce competition from domestic competitors such as Huawei. In stark contrast to Apple, Huawei's sales in China's high-end smartphone market increased by 64% over the same period, and its market share also increased from 94% grew to 165%, rising to second. Huawei's strength is due to the popularity of its Mate 60 series phones, as well as its extensive presence in lower-tier markets. Apple's declining sales in the Chinese market have adversely affected its global performance and market capitalization, and have also caused concern and bearishness among investors and analysts.
Apple's declining sales in China are a surprising phenomenon, as Apple has been quite successful in the Chinese market last year. In the second quarter of last year, China became the world's largest iPhone market, surpassing the United States for the first time in history, according to market research firm IDC. Analysts at IDC believe that Apple's continued success and resilience is due in large part to the growing growth of high-end devices, which now account for more than 20% of the market, driven by aggressive trade-in offers and interest-free financial installment programs.
However, Apple's dominance in the Chinese market did not carry over into this year. In the first six weeks of this year, Apple's iPhone sales in China fell 24 percent year-on-year, while sales in the Chinese smartphone market as a whole fell 7 percent, according to research firm Counterpoint. Analysts at Counterpoint believe that this is mainly due to Apple's lack of innovation, as well as stiff competition from domestic competitors such as Huawei. They point out that Apple's release of the iPhone 15 in September last year did not bring significant innovation, leading consumers to think that continuing to use older models would be enough. In addition, Apple has been squeezed by aggressive pricing from companies such as OPPO, Vivo, and Xiaomi.
In stark contrast to Apple, Huawei's sales in China's high-end smartphone market increased by 64% over the same period, and its market share also increased from 94% grew to 165%, rising to second. Huawei's strength is due to the popularity of its Mate 60 series phones, as well as its extensive presence in lower-tier markets. Analysts at Counterpoint wrote that Huawei's ramp-up in production capacity has allowed it to meet demand for its popular Mate 60 series, despite declining consumer confidence. They also noted that Huawei's share of the Chinese market is likely to grow further in the second half of the year, as it will launch the new P 60 series of phones, as well as new products from its sub-brand Honor, which was spun off from Huawei. Honor also saw a 2% year-over-year increase in sales in the first six weeks of the year, with a market share of 104%, ranking third.
Apple's declining sales in the Chinese market have adversely affected its global performance and market capitalization, and have also caused concern and bearishness among investors and analysts. According to Apple's Q1 2024 fiscal year report released on February 1, Apple's quarterly revenue was 1195$800 million, above analysts' expectations of 1179$700 million, revenue returned to year-over-year growth, and iPhone revenue in the fiscal first quarter was $69.7 billion, higher than the expected 68.5$500 million. However, Apple's revenue in Greater China in the fiscal first quarter was 208$200 million, far less than the $23.5 billion expected by analysts.
Apple said it saw sales growth in all regions except Greater China, where sales were down nearly 13% from a year earlier. Due to the lack of optimism about Apple's next performance, the two investment banks downgraded Apple's rating. First, Barclays downgraded Apple's rating to "from neutral" and lowered its price target to $160, expecting Apple to exceed 15% in 2024. Subsequently, analysts at Piper Sandler also downgraded Apple's rating to "neutral" from "overweight" and lowered its price target by $15 to $205, citing concerns about insufficient demand for the iPhone. Just on January 12th, the market cap was 2Apple's $87 trillion has been overtaken by Microsoft, which has grown by more than $1 trillion in market capitalization over the past year, to become the world's second-most valuable company.
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