Apple faces growing threat as Huawei gains traction, Chinese consumers shift loyalty

30 Oct 2023

Apple faces growing threat as Huawei gains traction, Chinese consumers shift loyalty

There are several reports coming out of China that point towards an abysmal sales record for Apple’s latest iPhone model. Then the iPhone 15 has started a slower innings compared to its predecessor in the Chinese markets.

A 6% decline has been noted in the sales of the iPhone 15 since its launch month as compared to the previous year, a report from GfK states.

IDC, a mobile industry tracker, has stated that Apple’s shipments were down by 4% in the third quarter. One of the reasons behind these low numbers is the comeback of Huawei Technologies Co.’s in the mobile market.

Huawei’s Mate 60 series has sold 1.5 million models since its launch month. This is double that of 2022. What is astonishing is that Huawei was able to record these sales despite the supply problems it faced.

Hayden Hou, a China senior analyst at GfK, noted that amidst Huawei's robust growth, sales of the Apple iPhone 15 series dropped by 6 percent. He added that the Huawei Mate 60 series is expected to sustain its strong sales momentum in the future.

Huawei had suddenly released its Mate 60 and Mate 60 Pro models in the markets just before the launch of the iPhone. This attracted the attention of the buyers, which only increased with the use of the Chinese Kirin processor, which is the supposed solution to the trade sanctions by the U.S.

A preliminary sales report, recorded by Counterpoint Research and Jefferies, indicated that the decline in Apple sales could go beyond the double-digit percentage. The reason for this is said to be the country’s economic challenges, which are affecting consumer demands.

There have been a lot of key upgrades provided by the iPhone 15, but these are not enough to catalyze a growing demand for the model in the world’s biggest mobile market.

Apple gets a massive 20% of its revenue from the Chinese market. This is second only to the U.S. On top of this, technically, all of the world’s iPhones are manufactured in China. This is done through tech partners such as Foxconn Technology Group.

Over the past few months, there have been growing geopolitical tensions between the U.S. and China. This has put Apple in a risky spot. Certain government agencies and state-owned ventures in Beijing are enforcing a ban on the use of iPhones.

The American company has been actively seeking to diminish its dependence on Chinese manufacturing by extending its production capabilities into India and Southeast Asia, a move with unclear long-term consequences. This month, Beijing initiated an investigation into taxes and land usage related to Foxconn, Apple's primary iPhone assembler, adding further complexity to the situation in China.

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