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iPhone Shipments Projected to Decline Amid Rising Competition

2024.01.31

 

Key Takeaways

  • Apple may see a significant decline in iPhone shipments in 2024, impacted by the popularity of foldable phones and Huawei’s resurgence.
  • Analyst projections indicate a challenging year for Apple with minimal revenue growth expected.

Apple’s Market Challenges

Apple, which attained the top spot as a smartphone vendor in China last year, is now facing stiff competition. According to Ming-Chi Kuo, an influential analyst at TF International Securities, Apple’s iPhone shipments are expected to drop by 15% year-over-year. This reduction is attributed to the increasing market share of foldable phones and Huawei’s strong comeback in the Chinese market.

The Shift in Chinese Consumer Preferences

Kuo’s recent supply chain survey indicates that Apple’s weekly shipments in China have significantly decreased, with a continuing downward trend. The resurgence of Huawei as a leading smartphone maker and the shifting preference of high-end users towards foldable phones are cited as major factors influencing this trend. Additionally, new phone designs incorporating generative AI are reshaping consumer choices in the high-end segment.

Samsung’s Gaining Momentum

In contrast to Apple’s predicted downturn, Samsung is ramping up shipments of its Galaxy S24 series by 5% to 10%, capitalizing on the higher-than-expected demand for its AI-powered features. Meanwhile, Apple has reduced its shipment forecast for the iPhone 15 in the first half of 2024, suggesting a cautious approach in response to the market’s shifting dynamics.

Impact on Apple’s Product Strategy

With no significant design changes expected for the iPhone until at least 2025, Apple may face challenges in maintaining its shipment momentum and ecosystem growth. This stagnation in design innovation could further contribute to the company’s diminishing market share in the face of rapidly evolving consumer preferences.

Apple’s Financial Outlook

Apple is set to report its quarterly results soon, with analysts predicting only a marginal revenue growth of 0.6% year-over-year. Projections for the rest of the calendar year also indicate a period of single-digit growth, reflecting the increasing market pressures Apple faces. The company’s shares reflected this sentiment, with a notable drop on Tuesday afternoon.

 


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