TOPSHOT – Apple iPhone 15 series is on display for sale at The Grove Apple store on launch day on September 22, 2023 in Los Angeles, California. Photograph: PATRICK T. FALLON/AFP via Getty Images)
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apple The latest report from market research firm Counterpoint Research shows that iPhone sales in China dropped sharply in the first quarter of this year due to fierce competition from domestic brand Huawei.
Counterpoint data shows that Apple’s iPhone sales fell by 19.1% in the first three months of this year as Chinese telecom and consumer electronics giant Huawei’s smartphone business recovered.
Counterpoint said the Shenzhen, China-based company’s smartphone sales surged 69.7% in the first quarter.
This is largely due to the launch of the Huawei Mate 60 smartphone, which is equipped with high-end chips that support next-generation 5G mobile connectivity.
Starting in 2019, the United States imposed sanctions on Huawei to prevent it from obtaining such technology, almost destroying Huawei’s smartphone business.
Now Huawei is making a comeback. The company is China’s fourth-largest smartphone maker, according to a Tuesday research note from Counterpoint, putting pressure on third-ranked Apple.
Apple shares edged lower in U.S. premarket trading on Tuesday.
Ivan Lam, senior research analyst at Counterpoint Research, said in a statement: “Apple’s sales this quarter have been suppressed as Huawei’s comeback has directly affected Apple’s performance in the high-end market.”
“In addition, Apple’s replacement demand has declined slightly compared to previous years.”
Lam hinted that the iPhone maker may still see a recovery in China, with its flagship device likely to launch with new color options, deep discounts, and an expected demonstration of new artificial intelligence at the upcoming Worldwide Developers Conference (WWDC) in June Function.
“In the long term, this has the potential to significantly boost development,” he said.
Outlook for China’s Smartphone Industry
Overall, China’s smartphone sales increased by 1.5% year-on-year in the first three months of this year, marking positive growth for the industry in the second quarter.
Counterpoint said it expects the annual growth rate of China’s smartphone market to be only single digits in 2024.
The company said it expects Chinese smartphone makers to embed artificial intelligence features in their phones to drive new demand for new phones.
Chinese equipment manufacturer Both Xiaomi and Oppo have integrated Qualcomm Snapdragon 8 Gen 3 processors designed for artificial intelligence applications into their latest flagship phones.
Meanwhile, Huawei subsidiary Honor demonstrated an artificial intelligence-driven eye-tracking feature in its latest flagship smartphone, the Magic 6 Pro, which allows users to control their cars with their eyes.
Chinese smartphone companies may start incorporating new artificial intelligence technology into their budget phones in the future, Counterpoint said.
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