Apple’s iPhone sales soar in China – What’s driving the comeback?

In a surprising turn of events, iPhone shipments in China have seen a remarkable increase, outpacing Huawei, as highlighted in a recent report by Bernstein. Let’s delve into the details of this intriguing development:

• Smartphone shipments in China experienced a 3% year-over-year growth last month, primarily fueled by Huawei’s impressive 24% surge. Despite this, iPhone shipments also saw a noteworthy 5% increase, while non-Huawei Android devices faced a slight 1% decline.
• Apple’s triumph over Huawei in unit shipments can be attributed to a substantial discount that was available for a significant portion of the month, according to analysts at Bernstein.
• Notably, the smartphone sell-through shipment growth in June marks a decade of consecutive year-over-year gains, with the exception of January when shipments dipped due to the Chinese New Year falling in February this year instead of January last year.
• The uptick in June was further bolstered by promotions during the “618” Shopping Festival, adding to the overall positive trend in the Chinese smartphone market.
• Year-to-date data reveals an 8% increase in smartphone sell-through shipments in China compared to the previous year. Huawei led the charge with a remarkable 68% surge, while non-Huawei/Apple brands clocked in a 3% growth. Apple, however, experienced a 7% decline during this period.
• While the 8% year-to-date growth slightly exceeded expectations, it’s crucial to note that the second half of 2023 had higher shipments, setting a higher baseline for the remainder of 2024.
• Analysis comparing the “sell-through” data from CINNO with the “sell-in” data from CATR for June suggests that iPhone inventories in China could be on the higher side, according to Bernstein.
• Despite this, Apple has assured that global channel inventories at the end of the June quarter were at historically low levels, alleviating concerns around inventory issues for investors, as highlighted by the investment firm.
• The Android inventory buildup was more subdued, and with both MediaTek and Qualcomm guiding the September quarter below seasonality, this should help in clearing any excess stockpiles, enabling a smoother market flow.

The upward trend in iPhone shipments in China signals a promising trajectory for Apple in one of its key markets, showcasing the brand’s resilience and appeal in the ever-evolving smartphone landscape. As the market continues to shift and adapt, it will be intriguing to see how these developments unfold in the coming months, potentially setting the stage for new innovations and market dynamics.