TOPSHOT – The Apple iPhone 15 series is displayed for sale at the Grove Apple store on its release day in Los Angeles, California, September 22, 2023. (Photo by Patrick T. Fallon / AFP) (Photo by PATRICK T. FALLON /AFP via Getty Images)
Patrick T. Fallon | Afp | Getty Images
Apples iPhone sales fell sharply in China in the first quarter of this year as the company faced stiff competition from domestic brand Huawei, according to a new report from market research firm Counterpoint Research.
Apple saw sales of its iPhones fall 19.1% in the first three months of the year, according to Counterpoint data, as Chinese telecommunications and consumer electronics giant Huawei saw a resurgence of its smartphone business.
The Shenzhen, China-based company saw its smartphone sales increase 69.7% in the first quarter, Counterpoint said.
This is largely due to the launch of Huawei’s Mate 60 smartphone, which features a high-end chip supporting next-generation 5G mobile connectivity.
Starting in 2019, the United States imposed sanctions on Huawei in an effort to prevent it from accessing this technology, nearly wiping out Huawei’s smartphone business.
Today, Huawei is making a comeback. The company is the fourth-largest smartphone maker in China, according to a research note published Tuesday by Counterpoint, putting pressure on Apple, which ranks third.
Apple shares were slightly lower Tuesday in U.S. premarket trading.
China Smartphone Industry Outlook
Overall, smartphone sales in China increased 1.5% year-on-year in the first three months of the year, marking the second quarter of positive growth for the industry.
Counterpoint said it expects low single-digit annual growth for China’s smartphone market in 2024.
The company hinted that it expects AI features built into phones from Chinese smartphone makers to spur renewed demand for new mobile phones.
Chinese device makers Xiaomi and Oppo have both integrated Qualcomm’s Snapdragon 8 Gen 3 processor, designed for AI applications, into their latest flagship phones.
Huawei spin-off Honor, meanwhile, introduced an AI-based eye tracking feature in its latest flagship smartphone, the Magic 6 Pro, which allows a user to control a car using their eyes .
Chinese smartphone makers will likely start including new AI advancements in their mid-price phones in the future, Counterpoint said.
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