After years of competition, the iPhone has become the top-selling smartphone in China, the world’s largest smartphone market. It is good news for Apple Inc. (NASDAQ: AAPL) shareholders, who have faced worry about iPhone 15 sales.
IDC, one of America’s top tech research firms, reported that China smartphone shipments dropped 5% last year to 271.3 million. The firm said, “This was the lowest volume in a decade, stemming from a soft economic recovery and weak consumer sentiment.”
Apple’s share of China market shipments in 2023 was 17.3%. That was down 2.2%. However, second place, Honor, a China-based manufacturer, had a market share of 17.1%, which fell a much larger 10.3% compared to 2022. Oppo, Vivo and Xiaomi, the other large local smartphone companies, had larger market share declines than Apple did.
Wall Street has been concerned that Apple’s iPhone 15 sales were weak and that this would cause its overall revenue to fall. As of the most recent quarter, this was a fair concern. Apple had revenue of $89.5 billion, down 1%. More importantly, iPhone revenue rose very modestly from $42.7 billion in the year-ago period to $43.8 billion. China revenue actually dropped from $15.5 billion to $15.1 billion.
The wider concern about the iPhone 15 is that it is not different enough from the iPhone 14 to draw a record number of customer upgrades. Modest improvements in its camera and chip may not be features most buyers care about.
Apple’s services business has been a bright spot, with revenue up in the past quarter from $19.2 billion to $22.3 billion. Even with brisk growth, that will not offset trouble with Apple’s iPhone flagship in the minds of investors. (Here are five reasons to avoid Apple products today.)
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