Apple Inc. started the new year with discounts on iPhones in China. This shows how hard it is for the tech giant to do business in one of the world’s most popular countries.
Reuters says that sales of smartphones with foreign brands in China dropped 47.4% in November compared to the same month in 2023. The data comes from the China Academy of Information and Communications Technology. According to a story by Reuters, this was the fourth month in a row that foreign smartphone shipments to China have gone down. In October, they went down 44.25% year-over-year.
We asked Apple AAPL -0.20% and the China Academy of Information and Communications Technology for their thoughts.
Friday, Apple shares are down 0.2%, while the S&P 500 is up 0.7% (SPX +1.26%).
In the past few years, China has had problems with its property market and slow economic growth, which has hurt consumer trust. Chinese smartphone names like Vivo and Huawei are giving Apple a lot of tough competition.
In China from January 4 to January 7, Apple is discounting iPhones because of this. This is what the company’s website in China says.
Apple’s Greater China revenue fell short of forecasts by about $1 billion in its October fourth-quarter results, with $15.03 billion in sales compared to $15.08 billion in the same quarter last year. During the call to talk about the findings, Tim Cook, CEO of Apple, said that the company’s team in China is “clearly focused” on helping China’s economy.
According to data shared by research firm IDC in late October, Apple did return to the top five of the Chinese smartphone market in the third calendar quarter of last year. The launch of the iPhone 16 helped the company do this. IDC said that Vivo stayed on top with 18.6% of the market, up from 15.8% in the same quarter last year. Apple came in second with 15.6% of the market, which was less than the 16.1% it had a year ago. Third, fourth, and fifth place all went to Chinese names Huawei, Xiaomi, and Honor.
In a recent note, Dan Ives, an analyst at Wedbush and a well-known Apple bull, talked about the possible market for iPhone updates in China. He wrote, “We think there are 100 million Chinese iPhones that could be upgraded at any time in 2025.” The analyst said that the 16th generation of the iPhone was “just the start of a new era” for Apple. He also raised his price goal from $300 to $325. Wedbush kept its “outperform” rating for Apple as well.
Ives did say, though, that China also offers a risk for Apple. He wrote that the country “remains a key growth driver for the coming years.” However, cheaper smartphones and other companies could hurt Apple’s sales there. The macroeconomic situation in China and the tariff problem are also seen as long-term risks by the analyst.
Data from the United Nations shows that India passed China as the world’s most populous country in 2023.
A report from the World Population Review says that China’s population dropped from almost 1.423 billion in 2023 to 1.419 billion in 2024. India had almost 1.451 billion people in 2024, up from almost 1.438 billion the year before.
