A recent estimate by Ming-Chi Kuo projects that Apple’s iPhone shipments will experience a severe decline this year due to the growing dominance of foldable phones in the market and Huawei’s return in China.
Despite Apple’s success in becoming China’s top smartphone provider last year, Kuo points to a discernible change in the market. According to Kuo’s most recent supply chain study, shipments of “key upstream semiconductor components” have decreased, which might lead to a 15% drop in iPhone shipments year over year, with an estimated 200 million handsets shipped.
Following Ming-Chi Kuo, an analyst at TF International Securities, stating that the tech giant anticipates a decline in iPhone demand in 2024, Apple shares are alleged to have fallen 2%.
According to Bloomberg on Tuesday, January 30, the analyst stated that Apple has reduced its shipments of important semiconductor components, indicating a 10% to 15% decrease in iPhone shipments.
Apple did not respond to PYMNTS’s request for comment right away.
In a post on Medium on Tuesday, Kuo stated: “The iPhone faces structural challenges, such as the emergence of a new paradigm in high-end mobile phone design and the ongoing decline in shipments in the Chinese market, that will lead to a significant decline in shipments in 2024.”
According to Kuo, the new paradigm encompasses foldable phones as well as the incorporation of generative artificial intelligence-powered features into smartphones. He went on to say that the desire of high-end customers for foldable phones and the revival of rival Huawei are the main causes of Apple’s falling sales in China.
Despite discounts on a number of iPhone models, Apple’s iPhone sales in China fell 30% in the first week of 2024.
Analysts at Jeffries stated at the time that they anticipated a double-digit decline in smartphone shipments from the company by 2024. They also anticipate Huawei, a Chinese company, growing its market share.Although Apple’s smartphone shipments to China decreased in 2023, the iPhone continued to be the most well-liked smartphone among Chinese consumers.Kuo claims that Apple’s weekly shipments to China had decreased by 30% to 40% from the prior year, indicating a further downturn in the company’s fortunes. He believes that among the top international mobile phone brands, Apple will have one of the biggest decreases in 2024. China is a crucial market for Apple, accounting for a sizeable portion of iPhone sales, so any decline in sales there is noteworthy.
Kuo emphasizes the significance of shifting customer choices and market rivalry by attributing this loss to Huawei’s comeback and the rising inclination for foldable phones among high-end users in China. The landscape is also being reshaped by innovations like new phone designs that incorporate generative artificial intelligence.
With the new Galaxy S24 series, Samsung looks to be meeting demand as seen by a 5%–10% increase in shipments, which are fueled by the capabilities that artificial intelligence powers.Apple is working hard to integrate generative AI into the iPhone in the interim. The tech behemoth covertly completed a number of hires, hardware upgrades, and acquisitions with the goal of integrating AI into the upcoming smartphone generation.
