New data from one of America’s leading tech research firms show that iPhone sales are losing ground in an industry that is growing worldwide. It is another example of why Apple Inc. (NASDAQ: AAPL) investors should be concerned with the future of the iPhone 16.
24/7 Wall St. Key Points:
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A recent analysis reveals that iPhone sales are losing ground while the industry is growing worldwide.
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Success in China is particularly important to the future of Apple Inc. (NASDAQ: AAPL).
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According to IDC, global smartphone shipments rose 2.4% to 331.7 million in the fourth quarter of 2024. Apple’s shipments were the largest among all the companies measured. However, they declined 4.1% to 76.9 million. The really bad news is that two of the largest Chinese smartphone companies are gaining ground quickly.
Samsung is usually a strong number two to Apple in worldwide smartphone shipments. That was true again in the fourth quarter. Its shipments totaled 51.7 million. However, they were 2.7% lower year over year.
One Chinese company gaining ground rapidly is Xiaomi, which had shipments of 47.2 million in the quarter, up by 4.7%. Vivo did even better in terms of growth. Its shipments rose 12.7% to 21.7 million. IDC’s Francisco Jeronimo commented:
This past quarter was particularly remarkable for the largest Chinese smartphone vendors: Xiaomi, Oppo, Vivo, Honor, Huawei, Lenovo, realme, Transsion, TCL, and ZTE. They achieved a historic milestone as they shipped the highest combined volume ever in a quarter, representing 56% of the global smartphone shipments in Q4.
Does China Matter?
China is among Apple’s largest problems. The nation is certainly critical to its success. More than a billion people in China have smartphones. That is about triple the number in the United States.
What Apple calls “Greater China” had revenue of $15 billion in the most recent quarter, down a fraction from the same period the year before. Apple’s overall revenue rose 6% to $94.9 billion. Even if the China-based companies do not have large sales outside their home market, they represent a huge challenge to the growth of Apple’s sales there.
Apple’s global shipments face another challenge. The market has given its artificial intelligence play, what it calls “Apple Intelligence,” a cool reception, particularly in contrast to AI products from other tech companies like Microsoft and Amazon. While Apple says it will upgrade the product, it is not off to a strong start.
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