(Bloomberg) — Apple Inc.'s slump in iPhone sales in China is deepening and the company is likely to see another drop in unit sales this year, according to Jefferies analysts led by Edison Lee.
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The iPhone maker's latest generation got off to an unusually slow start in China last year, most recently escalating to a 30% year-on-year decline, Lee and colleagues said in a note on Sunday, citing industry controls. The rest of the country's wireless market grew in December, with Huawei Technologies Co. growing the fastest thanks to its new Mate 60 lineup of devices.
Weeks before the iPhone 15 went on sale in September, Huawei's debut of the Mate 60 Pro – which runs a new Chinese-made system processor – sparked a patriotic buzz that won back some of the customers it had previously lost to Apple. Jefferies estimates that Huawei will have shipped 35 million smartphones in 2023, with some supply constraints preventing that number from getting larger.
Apple posted a double-digit volume decline in December and Jefferies forecasts a similar decline in 2024. Discounts on Apple's smartphone range increased last week across various online shopping portals, depressing the average selling price without boosting volume growth.
Apple gained share in China after U.S. sanctions barred Huawei from top global chipmakers such as Taiwan Semiconductor Manufacturing Co. in 2020. The Shenzhen-based electronics company's return to competitiveness in the mobile phone market has helped it regain market share. It is currently developing its own software ecosystem to compete with Apple's iOS and Alphabet Inc.'s Android.
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