Huawei Overtake Apple in China's Smartphone Market

Since its well-received launch, Apple's iPhone 15 family has been beset by hardware and software issues that have stripped the polish away from Apple’s collection of slick launch videos. That run continues with the latest disappointing sales figures from China.

 

According to a Monday report from Jefferies analysts, Apple’s iPhone has officially been dethroned from its position as the smartphone market leader in China. 

 

The analysts said smartphone sales in China have showed positive growth year over year, driven primarily by high double-digit growth in Android sales led by Huawei, Xiaomi and Honor devices. But Apple’s iPhone has seen a significant, double-digit decline, and its volume growth year over year has been negative since the iPhone 15 launch, according to the analysts. As a result, Huawei overtook the iPhone in the No.1 spot for market share.

 

“We believe weak demand in China would eventually lead to lower-than-expected global shipments of iPhone 15 in 2023”, the analysts wrote, adding that the trend suggests the iPhone will “lose” to Huawei next year. 

 

Shares of Apple closed flat on Monday. 

 

The Jefferies analysts wrote that Android’s volume growth can’t be chalked up to discounts and that discounts on iPhones, excluding the iPhone 15 models, have been stable, while the average discount for Android “is not high”.

 

The analysts noted that resale iPhone 15 devices are all “trading at discounts to official selling prices”, which also reflects the weak demand in China.

 

Counterpoint Research similarly saw a decline in sales for iPhones in China, blaming an economy struggling to rebound from a Covid slump. However, Counterpoint analysts say Huawei could sell 5 to 6 million units of the Mate 60 Pro alone this year, and that could rise above 10 million units in 2024.

 

The Chinese numbers are in contrast to US numbers. The iPhone is doing well in the United States and after two strong weekends, is "expected to post double-digit growth”, according to the analysts at Jefferies. This will take the sting out of the Chinese sales figures, but the US numbers will have to be spectacular to keep global sales stable.