Apple tumbling in China, iPhone shipments in February fell by about one-third from a year ago

Apple’s fortune continues to be on precarious ground in China. Official state data released on Tuesday indicates a significant decline in Apple’s iPhone shipments in China, plummeting by approximately one-third compared to the previous year.

This decline suggests a challenging landscape for the US tech giant in the world’s second-largest economy, as it faces stiff competition from Chinese smartphone brands.

In an effort to improve relations with Chinese consumers, suppliers, and local authorities, Apple CEO Tim Cook visited Shanghai last week.

During his visit, Cook attended the opening of a new Apple Store in Shanghai’s Jing’an district, the largest in Asia, and met with representatives from major Apple suppliers, including BYD’s chairman and CEO, Wang Chuanfu. Cook also participated in the China Development Forum in Beijing, expressing his affection for China and its people.

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Despite its sizable base of Apple fans in China, the company is encountering regulatory and competitive hurdles. There have been reports of Chinese government agencies and offices allegedly banning the use of iPhones, although the government denies such regulations.

According to official data, foreign brands collectively shipped about 2.4 million smartphones in February, accounting for a 16.9 per cent share of the Chinese market. This reflects a substantial drop from the previous month, with Apple being the most significant foreign player.

In January, Apple shipped around 5.5 million units, marking a 39 per cent year-on-year decrease. To counteract declining shipments, Apple plans to unveil its long-awaited artificial intelligence (AI) strategy at its annual Worldwide Developers Conference in June. This strategy is expected to be centered around major software updates for its smart devices, including the iOS 18 upgrade.

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Additionally, Apple is exploring partnerships with local AI firms for the Chinese market, with reports suggesting Baidu as a potential supplier. However, no agreement has been reached between Apple and Baidu, according to China Daily.

Meanwhile, Chinese smartphone brands like Honor and Xiaomi are making strides in AI technology, showcasing their products at trade shows such as MWC Barcelona. To reaffirm its commitment to the Chinese market, Apple plans to expand its research and development (R&D) efforts in Shanghai and establish a new R&D lab in Shenzhen.

Despite these efforts, iPhone sales in China fell by nearly a quarter in the first six weeks of 2024 compared to the same period last year, placing Apple fourth behind Vivo, Huawei, and Honor. In contrast, Huawei Technologies experienced a significant sales increase, driven by strong demand for its flagship 5G Mate 60 Pro smartphone.

(With inputs from agencies)