A rapid fall in China’s weekly iPhone sales may signal bigger challenges ahead for Apple Inc, whose smartphone had mostly been resilient to the global economic downturn, according to Jefferies.
The Cupertino, California-based company’s sales of iPhones in China slumped by 27% in the week of Oct 24, a third successive week of increasingly steep drops. Even adjusting for the device’s earlier release this year, the negative trend holds and has been worse than the recent drops for Android rivals, Jefferies analysts including Edison Lee wrote in a note Sunday.
In the three months to September, China sales of iPhone were up 5.7% compared to a 15.2% fall for Android alternatives, Lee wrote. That changed in the past month and Apple may have shed four to five percentage points in market share in the country, according to the analysts’ estimates.
“While iPhone used to be the bright spot, it has become less bright and recent data points indicate a risk that it could potentially become the worst spot,” Lee wrote. “This is an incremental negative trend for the smartphone market, but a particular concern for the iPhone supply chain.”
The global smartphone market has recorded three straight quarters of decline in shipments this year, according to market research firm Canalys. Consumer appetites for discretionary products like personal electronics have soured with interest rate hikes and rising energy prices. And in China, the economic slowdown and Covid-19 lockdowns have sapped momentum for sales – Samsung Electronics Co called out China’s slowing mobile market as a drag on its components business when discussing earnings this month.
Already, Chinese consumers have bought fewer iPhone 14 handsets in the early days of its availability in September than the product’s predecessor a year ago. And smartphone shipments in China fell around 21% in August, according to national data released last week, capping a year of falling sales in the market. Apple has also ditched plans to increase production of its iPhone 14 product family, Bloomberg News reported last month. – Bloomberg