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People stand outside a recently opened Apple Store in Shanghai’s Jing’an district on March 26, 2024. Photo: AFP
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China is Apple’s ‘most competitive market’, says CEO Tim Cook after biggest iPhone sales drop in nearly 4 years

  • Global iPhone revenue fell 10 per cent in the first quarter, another sign of the competition Apple faces in China, the world’s largest smartphone market
  • Cook said that despite quarterly fluctuations, “over the long haul, I have a very positive viewpoint” on China
Apple
Kelly Le
Kelly Le
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Apple reported the biggest drop in iPhone sales since late 2020 during Thursday’s earnings call, in one of the biggest signs yet of weakening demand for the US tech giant’s products in the world’s largest smartphone market amid strong competition from Chinese brands such as Huawei Technologies.

Revenue from iPhones, Apple’s bread-and-butter business, fell 10 per cent from a year ago to US$45.7 billion in the three months through March, according to the company’s latest earning report. In Greater China, a critical iPhone market that includes Hong Kong and Taiwan, sales fell 8 per cent to US$16.4 billion in the same period.

Apple CEO Tim Cook said in the earnings call that China has been “the most competitive market in the world”. But the company maintains “a great view of China in the long term”, he added in comments that came weeks after a “fantastic trip” to the country in March for a new store opening in Shanghai, where he had “very warm and highly energetic” reception.

“I don’t know how each and every quarter goes and each and every week,” Cook said. “But over the long haul, I have a very positive viewpoint.”

Apple’s iPhone sales in China plunge as Huawei reaches for the top

Apple has been losing market share in China’s smartphone market, with iPhone sales dropping 19.1 per cent in the first quarter, according to consultancy Counterpoint.

It ranked third for the quarter with 15.7 per cent of the domestic market, behind Dongguan-based Vivo and Huawei spin-off Honor, which held 17.4 per cent and 16.1 per cent, respectively.

Meanwhile, Huawei sales have been ballooning since patriotic fervour over the release of the Mate 60 series phones last summer that run on a China-made chip from Semiconductor Manufacturing International Corporation.
Huawei smartphone sales jumped nearly 70 per cent in China in the first quarter, giving the company 15.5 per cent of the market, just behind Apple. Its latest Pura 70 series phones, unveiled in mid-April, are also reportedly equipped with a China-made processor, and the handsets have become key competitors to the iPhone 15 and 16 series phones.

US-sanctioned Huawei showed strong performance in the first quarter, with a net profit of 19.6 billion yuan (US$2.7 billion), up 564 per cent from a year ago, according to the company’s latest earnings results.

In response to analysts’ concerns about Apple lagging behind in artificial intelligence (AI) development, Cook said that Apple is “making significant investments” and that it will share some “very exciting things with our customers soon”.
Apple is expected to unveil a highly anticipated AI strategy during its annual Worldwide Developers Conference, which is set to run from June 10 to 14.

“We believe in the transformative power and promise of AI, and we believe we have advantages that will differentiate us in this new era,” Cook said.

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