- Bad news for Apple: iPhones have another new competitor in China.
- Huawei recently released a new series of smartphones called Pura 70.
- The devices give Chinese consumers another reason to ditch their iPhones.
Tim Cook would like you to think that everything is going well for Apple in China.
An interesting clip posted on Weibo about the Apple CEO’s recent visit to the country showed him being greeted by fans at the opening of a new store in Shanghai’s Jing’an district, casually taking iPhone selfies with famous models. a walk on the historic Bund.
“Every time I’m in China, I feel the unique charm here again. Thank you very much for the warm welcome!” Cook wrote social media post.
That’s the thing. When he posted the video last month, the Apple boss was indeed facing a major dilemma in China: iPhone sales fell an alarming 24% in the first six weeks of the year, according to Counterpoint Research.
Despite Cook’s allure, the downward spiral risks worsening.
On Thursday, Huawei launched a new smartphone series called Pura 70. They feature an advanced new camera system that looks like the trio of lenses on the back of the iPhone Pro models and start at $760.
Critically, the new phones give Huawei a new opportunity to take a larger share of Apple’s share of the Chinese smartphone market. After introducing the Mate 60 Pro series last year, it has already won over some consumers.
The Mate 60 has raised some fears in the US after it was revealed last year that it was equipped with advanced chips that Washington tried to prevent China from acquiring by imposing strict export controls.
These locally produced chips have helped Huawei make big profits in China by enabling features that rival those seen in iPhones. Now they are also believed to be on the new Pura 70 devices, According to Reuterstalking to a customer who is testing network speed.
Estimated counterpoint 64% increase in smartphone sales for Huawei in the first six weeks of the year. Pura 70 can keep up that pace. Counterpoint senior analyst Ivan Lam told Reuters that Huawei could almost double its phone shipments to 60 million units this year.
That’s certainly not what Apple wants to hear.
China has been its most important international market for several years, but it is under threat from the rise of local rivals who could tempt Chinese consumers with devices that look and feel almost identical to iPhones.
Apple has already shown vulnerability to domestic competition in China. Net sales in the Greater China region fell to $20.8 billion in the final three months of last year from $23.9 billion in the same period of 2022.
Wedbush analysts wrote last week that Apple is “managing one of the most challenging Chinese demand environments we’ve seen in the last five years.” They expect another decline in iPhone sales in the region at Apple’s quarterly earnings on May 2.
Cook may put on a brave face, but if Huawei has its way, iPhone sales in China could continue to slide.