Apple’s iPhone no longer has the biggest market share in China’s smartphone market, according to Jefferies analysts. That position has now been taken up by Huawei.
China’s Smartphone sales have grown positively year-on-year driven mainly by double-digit growth in Android device sales led by Huawei, Xiaomi and Honor devices. On the other hand, Apple’s iPhone has seen a double-digit decline in sales, while volume growth year-on-year has been negative since the iPhone 15 launched.
“We believe weak demand in China would eventually lead to lower-than-expected global shipments of iPhone 15 in 2023,” the analysts wrote, adding that the trend suggests the iPhone will “lose” to Huawei next year, said the Jefferies note.
China accounts for nearly one-fifth or 19% of Apple’s overall sales and is its most significant overseas market.
Jefferies analysts believe that while discounts on iPhones, excluding the iPhone 15 models, have been stable, while the average discount for Android is “not too high.”
They also noted that the resale iPhone 15 devices are all trading at discounts to their official selling prices, reflecting the weak demand in China.
On Monday, analysts at Morgan Stanley cut their price target on Apple to $210 from $215 earlier, saying that they are now “more guarded” about the company’s December quarter because of supply headwinds. They also cut iPhone expectations for the quarter by 8%.
The Morgan Stanley analysts said they will be watching Apple’s total revenue, services revenue growth, gross margin and revenue growth in China from its September quarter, but that the December quarter guide “is what will matter most.”
Shares of Apple ended flat on Monday.