Apple’s iPhone Shipments Drop 10% as Android Rivals Rise
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(Bloomberg) — Apple Inc.’s iPhone shipments fell a more-than-expected 10% in the March quarter, reflecting lower sales in China despite a broader rebound in the smartphone industry.
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The company shipped 50.1 million iPhones in the first three months, according to preliminary figures from IDC, below the average of analyst estimates compiled by Bloomberg of 51.7 million units for the period.
The Cupertino, California-based company has struggled to maintain sales in the world’s largest smartphone market since launching its latest generation of iPhones in September. The resurgence of Huawei Technologies Co., increased domestic competition and Beijing’s ban on foreign devices in the workplace have all weighed on sales.
The crisis is particularly pronounced in the context where the global mobile telephony market is recording its best growth in years. Smartphone makers shipped 289.4 million handsets during the period, up 7.8% from last year’s low, when many manufacturers were grappling with a glut of unsold devices . Samsung Electronics Co. regained the top spot in the March quarter, while budget-focused brand Transsion increased shipments by 85% and Xiaomi Corp. rebounded to close the gap with second-place Apple.
“The smartphone market is emerging from the turbulence of the last two years both stronger and changed,” said Nabila Popal, research director at IDC. “Although the two major players both experienced negative growth in the first quarter, it appears that Samsung is in a stronger position overall than in recent quarters.”
Apple’s main suppliers, Hon Hai Precision Industry Co., Murata Manufacturing Co., LG Innotek Co. and TDK Corp., fell in early trading in Asia on Monday, amid a broader selloff due to fears of an escalation of the conflict in the Middle East.
During the pandemic, Apple’s iPhone has shown the most resilience as consumers have shunned smartphone purchases from most of its Android-powered competitors. This inventory buildup has led to aggressive pricing from Chinese competitors like Xiaomi, which took months to exhaust their oversupply and are now starting to increase shipments. Huawei’s surprise return last year – with its own Chinese-made chip and HarmonyOS operating system on the Mate 60 series – has eroded Apple’s share of the Chinese high-end market since August.
“Increased competition in China is a big part of Apple’s first-quarter decline,” Popal said. Elsewhere, a number of regions started the year with excess iPhone inventories after large shipments in the final months of 2023, she added.
Average phone selling prices are rising as consumers increasingly opt for higher-end models that they intend to keep longer, IDC researchers found. Apple, which consistently maintains the highest ASP in the industry, has led the way in this area, with consumers showing a clear preference for its higher-tier models. Yet this year the company has resorted to unusual discounts to boost sales, with some retail partners in China taking up to $180 off the regular price.
In March, Apple opened a new department store in the center of Shanghai’s financial center, with CEO Tim Cook in attendance. China is home to the company’s largest retail network outside the United States and accounts for about a fifth of sales, which remain driven by the iPhone. However, many of the attendees who spoke to Bloomberg at the Shanghai store launch had acquired their iPhones more than two years ago. And while these Apple fans said they intend to stay within the Apple ecosystem, some said they’re also considering foldable device options from rivals or successor of Huawei’s Mate 60.
What Bloomberg Intelligence says
–With help from Jessica Sui.
(Updates with stock market reactions and comments)
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