Apple’s iPhone shipments plunge 10% in Q1 despite smartphone market rebound

In a surprising turn for the tech giant, Apple Inc. experienced a significant 10% drop in iPhone shipments during the March quarter, marking the steepest decline since the 2022 supply disruptions. With just 50.1 million units moved Apple fell short of expectations in a period when the broader smartphone market showed strong growth. Particularly hard-hit was China, where increased competition and regulatory challenges have stifled sales. Ahead of its May 2 earnings report, this downturn reveals mounting pressures on Apple as rivals like Xiaomi and Transsion make notable gains..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..By Vlad Savov.Apple Inc.'s iPhone shipments slid a worse-than-projected 10% in the March quarter, reflecting flagging sales in China despite a broader smartphone industry rebound. .___STEADY_PAYWALL___.The company shipped 50.1 million iPhones in the first three months, according to market tracker IDC, falling shy of the 51.7 million average analyst estimate compiled by Bloomberg. The 9.6% year-on-year drop is the steepest for Apple since Covid lockdowns snarled supply chains in 2022, the researchers said..The Cupertino, California-based iPhone maker has struggled to sustain sales in China since the debut of its latest model in September. The resurgence of rivals from Huawei Technologies Co. to Xiaomi Corp. and a Beijing ban on foreign devices in the workplace have all weighed on sales. The IDC data provides the first snapshot of the global performance of Apple's most important product ahead of earnings on May 2..Company1Q24 shipmentsYoY changeMarket shareSamsung60.1m-0.7%20.8%Apple50.1m-9.6%17.3%Xiaomi40.8m+33.8%14.1%Transsion28.5m+84.9%9.9%Oppo25.2m-8.5%8.7%Total (inc. others)289.4m+7.8%100%Source: IDC .The drop in iPhone shipments is significant given the overall mobile market registered its best growth in years. Smartphone makers shipped 289.4 million handsets in the period, marking a 7.8% rise from the trough of a year ago, when many manufacturers were grappling with a surfeit of unsold devices. Samsung Electronics Co. regained the top spot in the March quarter, while budget-focused Transsion increased shipments by 85% and Xiaomi bounced back to close the gap on second-place Apple..Read more: Apple's iPhone dethrones Samsung as 2023's best-selling smartphone, ending a decade-long reign."The smartphone market is emerging from the turbulence of the last two years both stronger and changed," said Nabila Popal, research director at IDC. "While Apple has been super resilient and seen a lot of growth in shipments and share over the last few years, it will be a challenge for it to maintain the pace of growth and the peak share it saw in 2023. As the market recovers further in 2024, IDC expects Android to grow much faster than Apple.".Prominent Apple suppliers Hon Hai Precision Industry Co., Murata Manufacturing Co. and LG Innotek Co. fell in Asia trading on Monday, amid a broader selloff on fears of escalating conflict in the Middle East..What Bloomberg Intelligence SaysXiaomi's 1Q handset shipments of 40.8 million units, according to IDC, jumped 33.8% year over year while both Apple and Samsung declined. Its strong handset sales were likely driven by a recovery in its overseas market and might lead to high-teens sales growth in the first quarter.– Steven Tseng and Sean Chen, analysts.During the pandemic, Apple's iPhone showed the greatest resilience as consumers pulled back from purchases of smartphones by most of its Android-powered rivals. That inventory buildup led to aggressive pricing by Chinese competitors like Xiaomi, which took months to deplete stocks and are now starting to ramp shipments back up. Huawei's surprise return to prominence last year — with its own made-in-China chip and HarmonyOS operating system on the Mate 60 series — has been eroding Apple's share of China's premium market since August..Read more: 🔒 Apple's China slump: Q1 sales drop 13%, but iPhone shows resilience."Increased competition in China is a big part of Apple's decline in Q1," Popal said. Elsewhere, a number of regions started the year with excess iPhone inventory after heavy shipments in the final months of 2023, she added..Average selling prices for handsets are rising, as consumers increasingly opt for premium models that they intend to hold on to for longer, IDC's researchers found. Apple, which consistently maintains the highest ASP in the industry, has led the way in this, with consumers showing a distinct preference for its higher-tier models. Still, the company has this year resorted to unusual discounts to spur sales, with some retail partners in China taking as much as $180 off the regular price..In March, Apple opened a large new store in the center of financial hub Shanghai, with Chief Executive Officer Tim Cook in attendance. China is host to the company's biggest retail network outside the US and accounts for roughly a fifth of sales, largely driven by the iPhone. Many of the attendees who spoke to Bloomberg at the Shanghai event had acquired their iPhones more than two years ago. And while those Apple fans said they intended to remain within the company's ecosystem, some said they would also consider Huawei's Mate 60 successor or foldable device options from rivals..Read also:.Tech giants' $10 trillion battle: Microsoft, Alphabet, Meta, Amazon, Apple's market showdown🔒 Apple's Empire in jeopardy: Worst market start in history sparks investor panic🔒 Apple's China dilemma: Geopolitical strains and Huawei's surge threaten tech giant's dominance.© 2024 Bloomberg L.P.

Apple’s iPhone shipments plunge 10% in Q1 despite smartphone market rebound

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