Apple's iPhone 15 Pro
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Analyst Ming-Chi Kuo says Apple has cut orders iPhone component sales grew 15% year-on-year as users in China increasingly prefer AI and foldable smartphones from Huawei.
It has been repeatedly reported that iPhone sales in China have fallen sharply, although signs of recovery are being observed. Tim Cook tried to explain the downturn as a consequence of the global economy, but now Ming-Chi Kuo says there are specific factors that the iPhone 16 won't fix.
English: iPhone shipments in 2024 will likely decline significantly by around 15% YoY due to structural issues/iPhone 2024: 15% YoY https://t.co/MKL4B67IvY
— (Ming-Chi Kuo) (@mingchikuo) January 30, 2024
In his full blog post, Kuo says his claims are based on a supply chain study that shows Apple has cut orders for key components by 15% YoY to around 200 million units. He says that “Apple may see the most significant decline among the world's major handset brands in 2024.”
He estimates that iPhone 15 inventory will decline by 10% in 1H24 compared to iPhone 14 inventory in 1H23. However, he expects the iPhone 16 to perform worse, with a 15% decline in the second half of 2024 compared to the iPhone 15 launch period in the second half of 2023.
Kuo says Apple is facing “structural change,” by which he means significant changes in what manufacturers produce and what consumers want in smartphones. Stating that weekly iPhone shipments in China have fallen by 30% to 40% in an unspecified number of “recent weeks,” he predicts that these structural changes will mean the downward trend will continue.
Chief among the changes in the smartphone industry is reportedly increased interest in foldable phones from buyers in China. Kuo doesn't give specific numbers, but says foldable phones have “gradually become the first choice for high-end users in the Chinese market.”
Apple has long been reported to be working on the iPhone Fold, but the latest rumors suggest the earliest it will release it is 2027. Kuo agrees that there won't be an iPhone in 2024 with significant design changes. , but this could happen in 2025.
However, he doesn't expect the iPhone to be folded. Instead, he believes that's when Apple will be able to release an iPhone with hardware features that will help with artificial intelligence.
The latest problem for Apple, and one that it cannot solve immediately, is the resurgence of Huawei. The local Chinese brand once looked like it was over after a US blacklist limited its ability to buy key components.
At that point in 2021, Apple was seeing a significant increase in iPhone 13 sales due to Huawei's problems. However, now that the company has returned, it is regaining popularity in China — and already sells both foldable phones and phones with artificial intelligence.
In addition, Huawei has also become a problem for Apple for its Apple Vision Pro headset, as it owns the trademark with the words “Vision Pro” in China. Apple is apparently hoping to address this issue, as Tim Cook has said the headset will be released in China later in 2024, and Kuo also believes international distribution will happen soon.
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