Apple Inc. experienced a nearly 10% decline in iPhone shipments in the quarter ending in March, which was worse than expected. This drop, to 50.1 million iPhones, is the steepest since the disruptions caused by Covid in 2022, according to market tracker IDC.
The company has been struggling to maintain sales in China, especially since the launch of its latest model in September. Competition from Huawei Technologies Co. and Xiaomi Corp., along with a ban on foreign devices in Chinese workplaces, have contributed to this decline.
While the overall smartphone market has seen a 7.8% increase in shipments, Apple’s decline is notable. Samsung Electronics Co. regained the top spot in the market, and Xiaomi saw a strong recovery, closing the gap on Apple.
IDC’s research director, Nabila Popal, believes that while Apple has shown resilience and growth in recent years, maintaining this pace will be challenging, especially with the expected faster growth of Android devices in 2024.
Apple suppliers such as Hon Hai Precision Industry Co., Murata Manufacturing Co., and LG Innotek Co. experienced stock price declines in Asia, partly due to broader market concerns about escalating conflicts in the Middle East.
During the pandemic, Apple’s iPhone was more resilient compared to its Android competitors. However, aggressive pricing by Chinese competitors led to inventory buildup, which is now being addressed as shipments increase.
Huawei’s resurgence in the Chinese market with its own chip and operating system has also impacted Apple’s market share. Increased competition in China, along with excess iPhone inventory in other regions, has contributed to Apple’s decline in the first quarter.
Consumers are increasingly opting for premium models, leading to higher average selling prices for handsets. Apple has been offering discounts to stimulate sales, especially in China.
Apple’s presence in China remains strong, with the country accounting for a significant portion of its sales. However, some consumers are considering alternatives from Huawei and other rivals.
Apple opened a new store in Shanghai in March, indicating its commitment to the Chinese market. Despite challenges, many consumers remain loyal to Apple but are also considering options from competitors.
