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Saturday, May 18, 2024

Huawei gains momentum as iPhone shipments dip

Despite Apple's triumph in 2023, analysts from Jefferies anticipate a continued decline in shipment volumes for Apple throughout 2024.

The latest data from research firm IDC reveals a 2.1% decline in Apple iPhone shipments in China during the final quarter of 2023, compared to the same period the previous year. This drop highlights the intensifying competition faced by Apple, primarily from local giants like Huawei, and sheds light on the challenges the U.S. tech giant encounters in its third-largest market.

Huawei’s Resurgence 

Despite facing severe setbacks due to U.S. sanctions, Huawei made an impressive comeback in 2023. The company’s smartphone shipments surged by 36.2% in the final quarter of the year, propelling Huawei to become the fourth-largest smartphone vendor in China with a market share of 13.9%. This remarkable rebound signals Huawei’s resilience and its ability to adapt to the dynamic landscape of the world’s biggest smartphone market.

Read More: Huawei is set to release new P70 series

Apple Overtakes Vivo 

While Apple managed to clinch the top spot in China’s smartphone market for the full year 2023 with a 17.3% market share, surpassing Vivo, industry analysts predict that the Cupertino-based company might face renewed challenges in the coming year. The limited product upgrades and stiff competition from local brands have impacted Apple’s high-end market share in China, raising concerns about its sustained dominance.

Factors Influencing Apple’s Performance 

IDC suggests that Apple’s struggles in maintaining its market share are attributed to the proliferation of rival products and the perceived lack of significant upgrades in its devices. The highly competitive Chinese market demands constant innovation, and Apple’s perceived lag in this aspect has diminished the overall attractiveness of iPhones among consumers.

Impact of Restrictions 

The restrictive measures imposed by some Chinese companies and government agencies on employees’ use of Apple devices mirror the security-driven restrictions implemented by the U.S. government on Chinese apps. This symmetrical approach highlights the intertwining of economic and geopolitical tensions between the two global powerhouses, influencing consumer choices and market dynamics.

Huawei’s Forward Momentum 

Analysts from Jefferies predict a rosy future for Huawei in 2024, estimating a significant rise in smartphone shipments to around 64 million units worldwide. This projection, more than doubling the figures from the previous year, underscores Huawei’s strategic initiatives and newfound strength in a market where it was once heavily sanctioned.

Apple’s Countermeasures 

To counter the challenging landscape, Apple resorted to offering rare discounts on its iPhones, slashing retail prices by as much as 500 yuan ($70). These promotional strategies, coupled with substantial discounts, managed to maintain demand from price-sensitive consumers through third-party distribution channels. However, it remains to be seen if such tactics will be sustainable in the face of increasing competition.

Read More: Huawei moves to totally abandon Android

Despite Apple’s momentary triumph in 2023, analysts from Jefferies anticipate a continued decline in shipment volumes for Apple throughout 2024, with a double-digit drop expected. Meanwhile, Huawei is anticipated to solidify its market share, showcasing the dynamic nature of China’s smartphone market and the challenges faced by even the most prominent global players.