Analysts at Jefferies Independent Investment Bank, led by Edison Lee, believe that the decline in sales of iPhone smartphones in the Chinese market will show a strengthening trend in the foreseeable future.
Currently, the decrease in the level of consumer interest in the mentioned devices included in the Apple product line in the market of the specified Asian country is an objective fact, the existence of which is beyond doubt and not belong to the category of subjective perception of what is happening. Analysts are convinced that the negative state of affairs for the iPhone in China will worsen shortly. For Apple, the current situation is a sensitive factor affecting its financial condition. China is one of the most important markets for the technology giant, which is why any deterioration in this geographical area worsens the company’s performance. In this case, the profit indicator is meant.
Sales of the iPhone 15 in China last year turned out to be a kind of disappointing event. The level of consumer demand for the new generation of Apple’s smartphone turned out to be atypically low. By the end of 2023, the sales volume of the iPhone 15 decreased by 30% compared to the result of a similar device of the previous generation in the last months of 2022. The relevant information is contained in a note by Jefferies analysts released at the end of last week.
At the same time, the overall situation in the Chinese smartphone market is currently positive. To a large extent, this state of affairs is because last year the local smartphone manufacturer Huawei released a new line of Mate 60 mobile phones. Chinese consumers have shown considerable interest in these devices.
The debut of the Huawei Mate 60 Pro smartphone has become an event that goes beyond the market of the corresponding products. An advanced Chinese-made system processor was found in this device. Against this background, there have been claims that Washington’s efforts to contain Beijing’s technological potential have proved ineffective. Some experts also noted that China is successfully overcoming obstacles in the form of restrictive measures by the United States aimed at depriving companies in the Asian country of access to advanced chips. Moreover, some American lawmakers have stated the need to tighten the export control regime. A group of Republican lawmakers led by Michael McCaul demanded that Huawei stop interacting with its American suppliers.
Burn J. Lin, former vice president of Taiwan Semiconductor Manufacturing Co., said in October that, in his opinion, the United States would not be able to stop the development of the mentioned company and other Chinese firms in the sphere of making chips.
US Secretary of Commerce Gina Raimondo stated in September that there was no evidence that Huawei and other brands from China could launch mass production of advanced microcircuits for smartphones. She also announced her intention to use all available tools to limit Beijing’s actions to promote its technology to the detriment of American interests. Gina Raimondo’s position on Huawei’s capabilities changed in October. She stated that the company’s progress in sphere-making microcircuits is alarming.
The symbolic significance of the Huawei Mate 60 Pro system processor is stated in the fact that it is a demonstration of Beijing’s success on the path to achieving technological sovereignty, which has become something like an urgent need against the background of current tensions in the area of geopolitical relations. Also, the specified smartphone became the reason for the refusal of some Chinese iPhone owners from the products of the American manufacturer.
Jefferies data shows that Huawei shipped 35 million mobile phones last year. According to analysts of this organization, sales of Apple smartphones this year will show a double-digit decline.
Last week, the iPhone manufacturer increased discounts on its mobile phones on various virtual commercial platforms. This decision reduced the average cost of the tech giant’s smartphones in the online environment but did not stimulate sales significant growth of these devices.
Apple had a substantial share in the Chinese market, while Huawei lost the opportunity to cooperate with the largest chip manufacturers due to restrictive measures from Washington. However, the Chinese company was able to restore its competitiveness, as a result of which its market position was improved. Huawei is currently developing its software ecosystem. These efforts are aimed at full-fledged competition with Apple’s iOS and Alphabet’s Android.