HomeBusinessApple's iPhone shipments drop 10% while Android rivals increase

Apple’s iPhone shipments drop 10% while Android rivals increase

(Bloomberg) — Apple Inc.’s iPhone sales are down 10% in the March quarter, reflecting slowing sales in China despite a broader rebound in the smartphone industry.

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According to IDC’s preliminary figures, the company shipped 50.1 million iPhones in the first three months, lagging the average of Bloomberg-compiled analyst estimates 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 the debut of the latest iPhone generation in September. The revival of Huawei Technologies Co., more domestic competition and a Beijing ban on foreign devices in the workplace have all weighed on sales.

The slump is especially pronounced against the backdrop of the overall mobile market showing its best growth in years. Smartphone makers shipped 289.4 million handsets during the period, up 7.8% from a year-ago low, when many manufacturers were struggling with a glut of unsold devices. Samsung Electronics Co. regained the top spot in the March quarter, as budget-focused brand Transsion increased shipments by 85% and Xiaomi Corp. returned to close the gap with Apple in second place.

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“The smartphone market is emerging from the turbulence of the past two years both stronger and changed,” said Nabila Popal, research director at IDC. “While the top two players both saw negative growth in the first quarter, it appears that overall Samsung is in a stronger position than in recent quarters.”

Prominent Apple 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 sell-off on fears of an escalating conflict in the Middle East.

During the pandemic, Apple’s iPhone showed the greatest resilience as consumers retreated from smartphone purchases made by most of its Android rivals. That inventory buildup led to aggressive pricing by Chinese competitors like Xiaomi, which took months to exhaust their oversupply and is now starting to ramp up shipments again. Huawei’s surprise return last year – with its own made-in-China chip and HarmonyOS operating system on the Mate 60 series – has eroded Apple’s share of the Chinese premium market since August.

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“Increased competition in China is a big part of Apple’s decline in the first quarter,” Popal said. Elsewhere, a number of regions started the year with a surplus of iPhone inventory after heavy shipments in the final months of 2023, she added.

Average retail prices for handsets are rising as consumers increasingly opt for premium models that they want to keep for longer, IDC researchers found. Apple, which consistently maintains the highest ASP in the industry, has led the way in this regard, with consumers showing a clear preference for its higher-end models. Still, the company has resorted to unusual discounts this year to boost sales, with some retail partners in China getting as much as $180 off the regular price.

In March, Apple opened a large new store in the center of the financial hub Shanghai, with CEO Tim Cook in attendance. China is home to the company’s largest retail network outside the US and accounts for roughly a fifth of its sales, which continue to be driven by the iPhone. However, many of the attendees who spoke to Bloomberg at the Shanghai store launch had already purchased their iPhones more than two years ago. And while those Apple fans said they planned to stay within the Apple ecosystem, some said they were also considering foldable device options from rivals or Huawei’s Mate 60 successor.

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What Bloomberg Intelligence Says

–With help from Jessica Sui.

(Updates with stock responses and commentary)

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