According to figures reported by China's government and cited by Bloomberg, Apple (AAPL) iPhone shipments have fallen around 33% in the month of February. The data comes as the company has met waning demand from the region, failing to maintain a competitive edge over Chinese smartphone manufacturers.
Yahoo Finance Tech Editor Dan Howley breaks down the latest developments on Apple's performance in China.
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Editor's note: This article was written by Nicholas Jacobino
Video Transcript
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- Well, China's lost its taste for Apple. That's at least according to new data analyzed by Bloomberg that shows iPhone shipments to China have fallen by a third compared to last year. Now Apple's been facing a number of issues in the country as it sees continued demand and low demand-- continued in low demand for its flagship device and its most important overseas market.
That's not the only headwind it's facing. Dan Howley is here with more. And Dan, of course, we've got the bans in place for some of the government agencies. How much of that is leading to the declines we're seeing in iPhone shipments there?
DAN HOWLEY: Yeah, it's hard to tell exactly, right? Those are limited to two government agencies. And, you know, there's far more consumers that would be able to buy iPhones than just government employees. But that 33% year-over-year decline, that's according to Bloomberg citing Chinese government data, is really stark.
We had counterpoint research in the earlier part of this month saying that sales fell 24% in China for the first six weeks of 2024. Overall, smartphone shipments, though, it's worth pointing out, declined in China's 7% during the same period. So it's not just that Apple was declining, it's that other smartphone makers were declining.
And then it's also important to point out that there was a large jump in sales around the same time last year because of pent-up demand during the end of 2022. And so it's a number of factors, but it's not looking very good as far as Apple goes, especially with the softer economy in China. We did see Huawei tick up pretty high. But again, that's because they were basically on death's door because of the US chip bans until they managed to get their own chips in place and start selling again.
But it really-- it behooves Apple to get this under control. Obviously, they're aware of that. Tim Cook was there earlier this week going to the opening of the new flagship store in Shanghai and then meeting with the Chinese President Xi Jinping to join other tech leaders in ensuring they're kind of positioning in the country.
But overall, I mean, you look at a number like this of 33%, and then you look at the antitrust battle that you guys were just talking about, you look at the new potential investigation that the EU is launching as far as the Digital Markets Act against Apple as well as other major tech players. You match that up with the earlier part of this year, where we saw issues with the Apple Watch and the company having to take the blood oxygen sensor out of that. And it really is just this compounding number of problems that the company seems to be facing at this point.
They just announced their WWDC event for June 10th. We're expected to see at least some kind of generative AI announcement. That's something that they've been woefully behind in. And that could prove to be a catalyst for them. But, you know, for a company that was riding high for so long, it's not doing poorly, by the way, still one of the richest companies in the world. But it's fallen behind Microsoft. And its stock has not been doing well so far this year. It's down more than 7% year-to-date and up just 6.25% over the last 12 months.
You look at Microsoft, you look at Google, they're doing a heck of a lot better.
JOSH LIPTON: Dan Howley, thank you, sir. Appreciate it.
