A recent report from analyst firm Counterpoint Research has revealed that Apple iPhone sales have plunged 24% in China, as the company faces stiff competition from Huawei, Xiaomi, Vivo, and Oppo.
China’s overall smartphone unit sales reportedly declined by 7% Year-on-Year (YoY) in the first six weeks of 2024, with key vendors like Apple, Oppo, and Vivo seeing double-digit declines.
In particular, Apple came under intense pressure from Chinese tech giant Huawei, whose consumer business is experiencing a resurgence in China after the launch of its Mate 60 smartphone.
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Speaking on the report, Senior Analyst Mengmeng Zhang said,
“Apple’s iPhone struggles during the first few weeks of the year for several reasons. Primarily, it faced stiff competition at the high end from a resurgent Huawei while getting squeezed in the middle on aggressive pricing from the likes of OPPO, Vivo, and Xiaomi. Although the iPhone 15 is a great device, it has no significant upgrades from the previous version, so consumers feel fine holding on to the older-generation iPhones for now”.
iPhone sales decline in China is attributed to the government decision of barring government officials and employees at state-owned enterprises from using iPhones.
Despite offering substantial discounts in the Chinese market, Apple faced a 2.1% decrease in its shipments in the final quarter of 2023. This decline has raised concerns about the company’s position in one of its key markets.
Notably, this decline has spurred Huawei to experience a significant resurgence in the Chinese smartphone market. The company’s substantial growth in shipments has solidified its position as a major player in the Chinese market.
Following Apple’s iPhone decline in shipments in China by 2% in the fourth quarter of 2023, Huawei’s shipments increased by 36.2% during the same period, which has positioned Huawei as the fourth-largest smartphone vendor in China.
The Chinese brand now has a market share of 13.9%, up from 10.3% in the same period a year ago. Huawei’s success can be attributed to its new product launches and the increasing demand for its 5G handsets.
The company also captured a massive 60% share of the 5G smartphone market and reached its highest-ever share in China, capturing 46% of sales volumes.
However, over the next two years, Huawei saw a significant fall in its market performance because of the U.S., ban. Not giving up, in Q3 2023, Huawei’s China smartphone sales surged, with a 37% year-on-year increase in smartphone sales.
This helped the company narrow the market share gap with top brands such as Apple. The company’s growth has been attributed to the success of its new smartphones, such as the Mate 60 Pro, which has contributed to its strong sales performance.
In October 2023, Huawei and Xiaomi led a double-digit rebound in the China phone market, with Huawei improving by 83%. The growth of Huawei’s smartphone sales in China has outpaced that of Apple, with the company being the fastest-growing smartphone maker in China in the third quarter of 2023, according to Counterpoint Research. This growth has been particularly notable in the 5G smartphone segment, where Huawei has made significant strides.
EU Issues A €1.8 billion Fine Against Apple for Alleged Breach of App Store Regulation, Company Vows to Appeal
Meanwhile, the European Union (EU) has imposed a €1.8 billion fine on Apple due to violations related to its App Store regulations, as the tech giant vows to appeal.
The fine is coming after an investigation into allegations that the tech giant company silenced music-streaming rivals, including Spotify Technology SA, on its platforms.
The bloc said that Apple device users in the EU were not able to make a free choice as to where, how, and at what prices to buy music streaming subscriptions.
Commenting on the EU’s decision to fine Apple upon investigation, EU antitrust chief, Margrethe Vestager said,
“For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store. They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem.”
The EU further revealed that Apple had behaved this way for almost a decade, which meant many users paid significantly higher prices for music streaming subscriptions. The Union further termed such a move as illegal, which it said has impacted millions of European consumers.
It is worth noting that the 1.8 billion-euro fine imposed on Apple, follows a long-running investigation triggered by a complaint from Swedish streaming service Spotify five years ago.
In a recent development the Cupertino giant says it plans to appeal the fine issued today by the European Commission over alleged anticompetitive practices in the streaming music market.
In a newsroom post, Apple called out Spotify, as the “primary advocate” and “biggest beneficiary” of the EC’s decision, noting that the streaming platform had a 56% share of the streaming music market in Europe.
Apple had also earlier shared various non-public details about Spotify’s business on Apple’s platforms by noting that the streamer accessed thousands of its APIs across 60 frameworks and that it tested its apps using Apple’s Testflight platform.
It also noted that its app had been downloaded re-downloaded or updated more than 119 billion times across Apple devices.
Apple further stressed that Spotify pays the company nothing in terms of App Store commissions because it sells its subscriptions only on its website.
Spotify did not take advantage of the reader app exception, Apple says, but rather “wants to bend the rules in their favor by embedding subscription prices in their app, without using the App Store’s In-App Purchase system,” its announcement states.
“They want to use Apple’s tools and technologies, distribute on the App Store, and benefit from the trust we’ve built with users and to pay Apple nothing for it,” Apple says. “In short, Spotify wants more.”
Apple says that while it respects the European Commission decision, it stated that the facts don’t support the decision, and therefore as a result it will appeal the judgment.
On the other hand, Spotify has lauded the EU’s decision to hold Apple accountable for anticompetitive practices in the streaming music market.
The streamer described the fine as a “powerful message” that sends a signal that even a monopoly like Apple is not able to wield power abusively” to control how other companies interact with their customers.
“Today’s decision marks an important moment in the fight for a more open internet for consumers. The European Commission (EC) has made its conclusion clear: Apple’s behaviour limiting communications to consumers is unlawful,” Spotify shared in a statement via a blogpost.