Apple set to face tough challenge from authorities, Huawei in China ahead of iPhone 15 launch

Apple is encountering significant challenges in the Chinese market, particularly as it prepares to launch the new iPhone 15 range. Industry analysts have reported that government agencies and state-owned enterprises in China have banned the use of Apple products, adding to the company’s difficulties. A recent video of people flocking to a Huawei store, as an Apple store lays desolate and practically empty, sums the recent turn of events pretty well.

Video footage showing a crowded #Huawei store in a shopping mall in Shanghai vs. an empty #Apple store have gone viral on Chinese social media. 🇨🇳

Apple $AAPL stock plunge might not be over.

A lot will be on the line when Tim Cook launches the company’s new iPhone 15 this week. pic.twitter.com/5itMOmpcSo

— Jesse Cohen (@JesseCohenInv) September 10, 2023

While Apple still enjoys a loyal customer base in China, geopolitical tensions and competition from Huawei Technologies pose significant obstacles. Huawei has recently introduced its Mate 60 Pro handset, equipped with a powerful processor despite facing tough US trade sanctions. This launch occurred just ahead of Apple’s scheduled release of the iPhone 15 models. Toby Zhu, an analyst at Canalys, stated that the new Mate phones from Huawei will present a significant challenge to Apple, which currently dominates the high-end segment of the Chinese handset market. The stability of Huawei’s supply chain will be a crucial factor in this competition. China overtook the United States as the world’s largest iPhone market in the second quarter of the year, accounting for 24 per cent of all iPhone shipments, according to estimates by market research firm TechInsights. This shift occurred despite a global year-on-year decline of 9.3 per cent in iPhone sales during the same period, marking Apple’s most significant second-quarter sales slump in eight years. Consequently, industry analysts are closely monitoring Apple’s performance with the iPhone 15 in China. Apple’s current high-end models, the iPhone 14 Pro and Pro Max, were the top two most popular devices in China in the previous year. However, the introduction of Huawei’s Mate 60 Pro, which boasts a competitive chip from Semiconductor Manufacturing International Corp (SMIC), could disrupt the premium segment of the Chinese smartphone market. The Mate 60 Pro, priced at 6,999 yuan (approximately $958), has experienced high demand and is currently sold out on Huawei’s official sales channels on platforms like Taobao and JD.com. Even iPhone scalpers have taken notice of the growing interest in Huawei’s new phones, with some planning to acquire Mate 60 Pro handsets alongside high-end iPhone 15 Pro models. Shop assistants at Huawei retail stores have reported being out of stock for the Mate 60 Pro, with new shipments expected to take up to two weeks. Additionally, there is growing interest in the Mate 60 Pro among existing Android users, and some local consumers are showing support for Huawei’s efforts to counter US sanctions. Meanwhile, Apple is collaborating with JD.com on its pre-sales program, allowing paid subscribers to the official Apple online store on JD.com to pre-purchase designated products ahead of the upcoming Apple event.