Apple’s Dominance Sales in China
In response to investor concerns, Apple (AAPL.O) is highlighting the robust demand for its iPhones in China, deftly maneuvering amidst the resurging strength of Huawei Technologies (HWT.UL) and local smartphone competitors.
During an exclusive Reuters interview, Apple’s CEO, Tim Cook, disclosed the company’s achievement of an unprecedented quarter for iPhone sales in mainland China in September. Notably, Apple secured four out of the top five positions for best-selling smartphones in urban China.
Despite the potential contraction of the overall Chinese smartphone market from July to September, Apple seems to have fortified its market standing. Cook expressed optimism for the upcoming holiday quarter, foreseeing heightened iPhone sales despite facing one fewer sales week compared to the previous year.
Canalys Reports on Smartphone Sales
Canalys, a revered research firm, reported a 3% decline in overall smartphone sales in China during July-September, indicating a more gradual descent than in preceding quarters. Specifically, iPhone sales in China reportedly dipped by 6%, while Huawei’s smartphone sales demonstrated robust growth during the same period.
Acknowledging a 2.5% dip in overall sales in China, Apple attributed it to challenges in Mac computer and iPad sales. Cook clarified that when factoring in foreign-exchange rates, actual sales in China experienced growth.
Despite Apple witnessing sales declines in three of the four quarters in its 2023 fiscal year, analysts express optimism for the fourth quarter. The broader smartphone market in China signals a potential rebound, with major Chinese online retailers enticing consumers with aggressive discounts on the iPhone 15 series ahead of the Singles Day shopping festival, thereby stoking demand.
Major Platforms’ Discounts
Key platforms, including JD.com (9618.HK), induoduo (PDD.O), and Alibaba’s (9988.HK) Taobao, are captivating consumers with substantial discounts on iPhone 15 models, marking prices down by up to 1,501 yuan ($205.14) below retail.
Acknowledging the initial underperformance of the latest iPhone series in China due to a truncated pre-holiday shopping period and supply mismatches, research consultancy Counterpoint anticipates improvement in the year-ending quarter, propelled by a robust performance during the 11.11 sales event.
Apple’s positive outlook aligns seamlessly with encouraging comments from its chip supplier Qualcomm (QCOM.O), signaling a potential easing of the two-year-long slump in the smartphone market, particularly in China. Qorvo (QRVO.O), another wireless connectivity chip supplier to Apple, reported diminishing inventory levels at their China customers and achieved its largest bookings quarter in over two years.
Despite encountering new competition from Huawei’s chips, **Qualcomm** expressed unwavering confidence that Huawei’s re-entry into the market would not adversely impact its relationship with Chinese smartphone companies.
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