Apple’s biggest issues in China right now after sales plunged

on Feb2
by | Comments Off on Apple’s biggest issues in China right now after sales plunged |

Apple CEO Tim Cook listens during a program at the Asia-Pacific Economic Cooperation Leaders’ Week at Apple Park in San Francisco on Nov. 17, 2023.

Andrew Caballero-Reynolds | AFP | Getty Images

Apple is facing renewed challenges in China, one of its most critical markets.

The iPhone giant’s sales in the greater China region in the December quarter fell nearly 13% to $20.8 billion.

China was once seen as the major growth driver for the company, but last year, cautious consumer sentiment combined with intense competition, in particular from a rejuvenated Huawei, posed a challenge to the Cupertino, California-based giant. In 2024, it may not get any better.

“Two key factors were holding Apple back in 4Q23 — a more cautious and rational spending sentiment and the challenge from Huawei which created more buzz in the market than the new iPhone 15 series,” Will Wong, senior research manager at IDC, told CNBC.

“We don’t expect the iPhone’s shipment growth to return to positive territory in 2024 in China, with Huawei expected to remain the key competitor while more advanced technologies like AI and foldable grabbing more attention from consumers,” Wong added.

So what challenges does Apple face in the world’s second-largest economy?

Huawei comeback

Huawei could add 10 million units' worth of headwinds to Apple in China, IDC says

High-end competition

Cautious consumer

Is Apple no longer cool?

Deepwater’s Doug Clinton on Big Tech earnings: You have to give the best grade to Meta

This has led many to question Apple’s innovation in the smartphone arena. Koren suggested this may be one reason Apple’s brand is suffering.

“I think that until Apple can innovate to the point where they can bring the reputation back that having the iPhone is a must have, it is going to be difficult,” Koren said.

Geopolitics

Apple doesn't have 'cool reputation' among Gen Z, says portfolio manager

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