In yet another sign that Apple Inc. (NASDAQ: AAPL) iPhone sales and earnings are in deep trouble, Bloomberg posted an exclusive article stating that iPhone sales in China dropped 19% in the first quarter, the worst quarter since 2020.
“The iPhone weakness is remarkable in part because the first quarter, when China celebrates the Lunar New Year, is traditionally a period of heightened consumption,” the news service reported. It also said that sales of local smartphone company Huawei rose 70% in the quarter and put it in the top spot.
Apple has several local competitors and Samsung, which jockeys with Apple each year for the global lead in smartphone sales.
Apple faces at least two challenges in China. The first is that the iPhone 15 may have needed to add more new features compared to the iPhone 14. The other is the unprecedented number of local competitors that, based on many opinions, make smartphones that are close to Apple’s in quality and features.
Apple’s earnings problem is that iPhone sales still dominate its revenue. This will likely show up in the quarter that it is about to announce. (See how much money Apple makes every minute.)
In the most recently reported quarter, iPhone sales were nearly $70 billion of Apple’s $120 billion revenue. China sales are a large component, and that figure is falling. In that quarter, China sales were $21 billion, down from $25 billion a year ago.
China is the world’s largest wireless market. Therefore, Apple has to be a major winner there to keep its earnings machine working.
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