BEIJING, Feb 03 (Reuters): Apple's weak China sales performance may have shocked investors, but customers and analysts have been noting the rising challenges the company faces in its third-largest market.
Intensifying competition from domestic rivals, coupled with longer upgrade cycles as consumers spend more cautiously amid an economic slowdown, have stunted Apple's China growth, with sales there nosediving by 13 per cent in the quarter ending in December to $20.8 billion and missing estimates of $23.5 billion.
Shares of the company dipped about 3 per cent in early trading on Friday, following the disappointing China sales.
"Apple's sales decline in China is not surprising given the strong competition it faced from local brands like Huawei and Xiaomi," said Toby Zhu, an analyst with research group Canalys.
Apple did not immediately respond to a request for comment. As the world's largest smartphone market, China is crucial to Apple's sales growth. For years, Apple has been the premium phone brand of choice in the country but the tide is now turning.
The pressure on Apple intensified in the second half of the year after Huawei's comeback in the high-end smartphone market with its Mate 60 series phones powered by a domestically-made chip.
Other leading Android brands like Xiaomi also edged into the high-end turf that Apple has traditionally dominated. Xiaomi launched its premium Mi 14 model in October, touting its long battery life and camera capabilities. It sold 1 million units within a week of launch.
Canalys' Zhu said Chinese manufacturers are gradually breaking into Apple's core price segment by introducing higher-priced foldable products.
Apple’s China sales tumble highlights waning clout as local brands gain
FE Team | Published: February 03, 2024 22:03:59
Apple’s China sales tumble highlights waning clout as local brands gain
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