Cupertino, California – Apple Inc.’s iPhone shipments saw a significant 10% decline in the March quarter, falling below analyst expectations, particularly in China where sales have been struggling. Despite a wider rebound in the smartphone industry, Apple shipped 50.1 million iPhones in the first three months, missing the estimated 51.7 million units for the period. The company has been facing challenges in maintaining sales in China due to increased competition from local brands like Huawei, as well as a ban on foreign devices in certain workplaces.
The overall mobile market experienced its best growth in years, with smartphone shipments reaching 289.4 million handsets in the period, a 7.8% increase from the previous year. Samsung Electronics Co. regained the top spot in the March quarter, while budget-focused brand Transsion and Xiaomi Corp. made significant gains. Despite the growth in the market, Apple has been struggling to keep up in China, where Huawei’s resurgence with its own chip and operating system has been impacting Apple’s market share.
Apple suppliers like Hon Hai Precision Industry Co., Murata Manufacturing Co., LG Innotek Co., and TDK Corp. experienced a decline in early trading due to concerns over escalating conflicts in the Middle East. During the pandemic, Apple’s iPhones showed resilience compared to its Android-powered rivals, but Chinese competitors like Xiaomi have been aggressively pricing their products to clear excess inventory, affecting Apple’s market share in China.
Increased competition and excess iPhone inventory in several regions have contributed to Apple’s decline in the first quarter. However, the company has been focusing on premium models that consumers are increasingly opting for and holding onto for longer periods. Apple has been offering discounts to boost sales, with retail partners in China offering significant price cuts. The opening of a new store in Shanghai, attended by CEO Tim Cook, reflects Apple’s continued investment in China, which remains a vital market for the company.
Despite Apple fans expressing loyalty to the brand, some are considering options from competitors, including foldable devices and Huawei’s latest models. With consumers shifting towards premium models and holding onto their devices longer, Apple is facing challenges in maintaining its market share in certain regions. The company’s strategy to offer discounts and focus on premium models may help drive sales in the coming quarters, but increased competition and changing consumer preferences pose ongoing challenges for Apple’s iPhone sales.