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Apple may finally be getting past its China slump

Tom Carter   

Apple may finally be getting past its China slump
  • Apple may be catching a break in China.
  • Data showed foreign smartphone sales, the majority of which are iPhones, rose by 52% in April.

Apple's China woes may finally be easing.

Shipments of foreign smartphones in China, the majority of which are iPhones, rose by 52% in April, according to data from the China Academy of Information and Communications Technology (CAICT) reported by Reuters.

The CAICT is a research firm affiliated with the Chinese government. Business Insider contacted the firm for further comment but didn't immediately hear back.

That's well above the 12% rise recorded by the CAICT in March, and it comes after Apple aggressively cut iPhone prices and rolled out new promotions to boost flagging sales.

Research firm Counterpoint research estimated the Silicon Valley heavyweight had sunk from first to third place in the Chinese smartphone market earlier this year, after sales dropped 19% year-over-year in Q1.

Apple CEO Tim Cook disputed third-party reports that iPhone sales in the country were struggling in Apple's most recent earnings call, telling investors that sales of Apple's smartphone grew in mainland China during the first quarter.

However, Apple's revenue from greater China, which includes Hong Kong and Taiwan, declined 8% in the quarter year-over-year, and the tech giant is facing growing competition from local upstarts like Honor, Vivo, and Huawei.

Huawei's iPhone 15 rival, the Mate 60, proved a big success with customers when it launched last year. The company has now rolled out a new series of smartphones called the Pura 70, which are designed to compete with the iPhone Pro.

Apple has also faced pressure from the Chinese government, with government employees being told not to use iPhones at work and the security of Apple's flagship mobile device publicly questioned by state officials.

Despite these challenges, China remains a crucial market for Apple. The company reportedly plans to sell its Vision Pro VR headset in the country, and Cook told investors Apple's long-term position in the world's biggest smartphone market was still positive.

"Despite the ups and downs in the market, this new data underlines the fact that the iPhone is the product to beat, and Apple is in a remarkably strong position when it comes to not only its installed base of users, but future growth potential," Ben Wood, chief analyst at CCS Insight, told BI.

"My view is that people who track Apple underestimate them at their peril to some extent because although we have seen a slowdown, we know that the iPhone remains an extremely desirable product," he said.

He added that although local manufacturers such as Huawei and Xiaomi have seen strong sales, they primarily compete against each other rather than Apple's high-end devices.

"We feel that the Chinese manufacturers are waged in extremely intense competition between themselves, but that won't necessarily move the needle against Apple," Wood said.

Apple did not immediately respond to a request for comment made outside normal working hours.

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