iPhone sales tumble in China: a 30% decrease adds to Apple's tough times

[midian182]

In brief: Apple might be the biggest company in the world by market cap, but not everything goes Cupertino's way. The tech giant has had a difficult few weeks, and it looks like things aren't getting any better following news that iPhone sales have fallen 30% YoY in China during the first week of January.

Apple has long been one of the few western companies to maintain strong ties with China; CEO Tim Cook called the pair's relationship "symbiotic" last March. But Apple's presence in the Asian nation has suffered over the last few months.

In September, Apple shares fell following reports that China was preparing to expand a ban on the use of its devices beyond sensitive departments to government-backed agencies and state companies.

October brought more bad news for Apple, this time it was from data analyst companies GfK and IDC. It showed that the iPhone 15 hasn't been selling as well in China as its predecessor, with sales down 6% in its launch month compared with the prior year. The entirety of 2023 has seen Apple's market share in the country fall around 4% year-on-year, while local rival Huawei has seen its share rise 6%.

From one of Tim Cook's visits to China last year

The situation for Apple appears to be getting worse. Jefferies analysts (via CNBC) said iPhone sales in China were down a massive 30% during the first week of the year, while Xiaomi and Huawei have remained stronger with flat sales. The analysts believe iPhone volume will fall by double-digits in 2024. Jefferies previously said that Huawei's Mate 60 Pro has been outpacing the iPhone 15 in China.

It's not just China where Apple is facing problems right now. There's the legal battle it is fighting in the US over the Apple Watch Series 9 and Watch Ultra 2 that could see the devices permanently banned from sale due to a patent infringement. It could also be facing an antitrust lawsuit from the US government. Moreover, the company has seen its stock downgraded twice during the first week of January, by Barclays and Piper Sandler. Barclays, in its downgrade note, blamed "lackluster" iPhone 15 sales data from China for the move.

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https://www.techspot.com/news/101443-iphone-sales-tumble-china-30-decrease-adds-apple.html

 

[Neatfeatguy]

Folks don't need a new phone every year.

I just passed the mark for year 6 with my S8 this past December. Surprisingly it still holding up well enough to where the battery still lasts me throughout the day. Usually around 30-45 minutes of playing a few random games, some basic web use, email checking, some texting and the occasional phone call leaves me with around a 30% charge.

 

[maxxcool7421]

F@@K apple... they have one of the LARGEST literal bank balances of cash of any company on earth .. they are fine

 

[yRaz]

Folks don't need a new phone every year.

I just passed the mark for year 6 with my S8 this past December. Surprisingly it still holding up well enough to where the battery still lasts me throughout the day. Usually around 30-45 minutes of playing a few random games, some basic web use, email checking, some texting and the occasional phone call leaves me with around a 30% charge.

I'm at almost 3 years with my s21 and I don't signs of it stopping soon. On top of that, this thing is a tank so I don't think I'm gonna break it and it should have MANY times.

 

[RandomWAN]

Folks don't need a new phone every year.

I just passed the mark for year 6 with my S8 this past December. Surprisingly it still holding up well enough to where the battery still lasts me throughout the day. Usually around 30-45 minutes of playing a few random games, some basic web use, email checking, some texting and the occasional phone call leaves me with around a 30% charge.

Same here. I've had my S9+ since launch and I am going to ride it out until it dies. I'm not missing anything by not upgrading every 1-2 years.

 

[Kashim]

I don't get these articles and I don't get the so called "analysts" that cry when an ultra rich company doesn't make exorbitant profits quarter after quarter. For example, if you're a company that makes $100 billion in profits one quarter and then the next quarter you only make $96 billion, then your profits are down 4% and these analysts act like the sky is falling. No matter how much profit your company makes you have to make more and more every single quarter or else these people act like it's the end of the world. Isn't capitalism wonderful?

 

[Atmajaya2020]

No matter how much profit your company makes you have to make more and more every single quarter or else these people act like it's the end of the world. Isn't capitalism wonderful?

for them, money is the one that make their worlds spinning..
so less profit, less money..
less money, world starts spinning slowly..
and that is the end of the world..

 

[p51d007]

Part of it too, is because Huawei and other Chinese companies are outselling the iPhone in CHINA because CHINA is putting pressure on their "citizens" to buy from CHINESE companies instead of AMERICAN companies, along with the you don't need to upgrade every year, and the economy sucks.

 

[BuckarooBonzaii]

Apple will be fine. Big Corps. always have contingency plans.

 

[Gezzer]

I don't get these articles and I don't get the so called "analysts" that cry when an ultra rich company doesn't make exorbitant profits quarter after quarter. For example, if you're a company that makes $100 billion in profits one quarter and then the next quarter you only make $96 billion, then your profits are down 4% and these analysts act like the sky is falling. No matter how much profit your company makes you have to make more and more every single quarter or else these people act like it's the end of the world. Isn't capitalism wonderful?

It's because end users aren't their customers, stock holders are. In fact this holds true for virtually all large corporations. What products and/or services they supply are totally irrelevant, as long as they create ever increasing profit margins. If they don't stock prices fall and investors freak out, because again a companies executives job is to prevent it happening. Welcome to feudalism 2.0 where the peasantry's (that's us) job is to keep making the wealthy wealthier.

 

[Bobbydpue]

"Apple's tough times" I'm not going to feel sorry for a company that charges $200 for 256GB of storage or that same amount for 8GB of RAM.

 

[havok585]

"Jefferies previously said that Huawei's Mate 60 Pro has been outpacing the iPhone 15 in China."

Well of course it has, a superior product with same price or lower will always sell better, if the customer has 2 cells of brain working.

 

[Dreadcthulhu]

I don't get these articles and I don't get the so called "analysts" that cry when an ultra rich company doesn't make exorbitant profits quarter after quarter. For example, if you're a company that makes $100 billion in profits one quarter and then the next quarter you only make $96 billion, then your profits are down 4% and these analysts act like the sky is falling. No matter how much profit your company makes you have to make more and more every single quarter or else these people act like it's the end of the world. Isn't capitalism wonderful?

Look at it this way; some other companies are making more money than they did last year. If you are choosing where to invest your money, are you going to pick the companies that have rising profits, or the companies that have falling profits? Should the people who manage other people's money, like 401k or pension funds, invest in companies that have rising profits, or companies that have falling profits? And falling profits can be a sign of long term trouble ahead for a company; in the long run nothing is too big to fail.

 

[Dr Roboto]

I don't get these articles and I don't get the so called "analysts" that cry when an ultra rich company doesn't make exorbitant profits quarter after quarter. For example, if you're a company that makes $100 billion in profits one quarter and then the next quarter you only make $96 billion, then your profits are down 4% and these analysts act like the sky is falling. No matter how much profit your company makes you have to make more and more every single quarter or else these people act like it's the end of the world. Isn't capitalism wonderful?

In the business world: "When you stop growing you start dying." This is the core rule that stock market runs on. Most stock holders want significant returns (20%, 50%, 1000%) Year over Year, and you only get that when a company is growing. Once a company plateaus in growth, you are not a "growth stock" anymore and the selling starts. Companies then switch to dividends, which are significantly lower in the 3%-6% range and much less desirable.

 

[Superconductor]

Apple has a lot on it's plate right now. I'm speechless..

 

[Greggs]

In the business world: "When you stop growing you start dying." This is the core rule that stock market runs on. Most stock holders want significant returns (20%, 50%, 1000%) Year over Year, and you only get that when a company is growing. Once a company plateaus in growth, you are not a "growth stock" anymore and the selling starts. Companies then switch to dividends, which are significantly lower in the 3%-6% range and much less desirable.

You're describing a risk premium but not all investors are chasing top yielding investments. Apple was already transitioning to an income stock when Warren Buffett came on board, as he isn't a high risk, high growth investor.

 

[ZedRM]

I see this as good news! Apple need a swift kick in the financial nadds!