Apple cuts iPhone shipments due to lower demand in China

Apple Retail Executive Deirdre O'Brien, Apple Sanlitun, Beijing

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Apple According to analyst Ming-Chi Kuo, iPhone shipments in 2024 will decrease compared to 2023, with a significant decrease due in part to reduced supplies to China.

Apple is having trouble in China, with reports that local sellers have overtaken the iPhone in the market. It now appears that the problems in China will impact Apple's overall shipments for the year.

In a Medium post Tuesday, TF Securities analyst Ming-Chi Kuo cited supply chain research that showed Apple has cut orders for key semiconductor components that will be used in the iPhone 15 and iPhone 16 generations.

The decline could be from 10% to 15% in six months of 2024, Kuo writes. Overall, total shipments would be 200 million units, which Kuo said would be down 15% from last year if that turns out to be true.

As for why shipments are falling, Kuo suggests it is due to the shift to smartphones with generative AI elements and foldable designs in the high-end market. Kuo also blames Huawei for its return to the Chinese market.

Although Samsung allegedly revised its forecast for shipments of iPhone 15 models in the first half of 2024, Samsung instead increased shipments of the Galaxy S24 by 5-10%. This is apparently due to higher than expected demand for the range and its generative AI functionality.

Apple's weekly shipments to China have also dropped by 30% to 40% over the past few weeks. Kuo expects this trend to continue amid competition from Huawei and foldable models in China.

Kuo believes that Apple will not introduce iPhone models with updated designs and a more advanced approach to artificial intelligence until 2025. There are rumors that Apple will release the iPhone Fold later that year.

During the release of Apple's financial results for the first quarter of 2024 and a conference call, the company's top managers warned that the second quarter results could be worse than originally expected.

Kuo's comments appeared simultaneously with a discussion among Wedbush analysts about the iPhone manufacturer.

Wedbush told investors he was maintaining his price target for Apple despite numerous problems ranging from the iPhone in China to the cancellation of the Apple Car. It said pent-up demand for the iPhone 16 will help overcome any current concerns.