Apple's Q3 Smartphone Sales Slip Despite Strong iPhone 16 Demand

Apple Inc’s AAPL smartphone sales experienced a slight decline of 0.3% year over year in the third quarter. This drop came even as demand for the newly launched iPhone 16 series, which hit the market in September, remained steady compared to previous iPhone models, according to a report from IDC.

Despite the overall dip in sales, Apple managed to secure its position as the second-largest player in China’s smartphone market, achieving a market share of 15.6%. This followed closely behind Vivo, which topped the market with an 18.6% share, thanks to a significant 21.5% growth in its shipments.

Additionally, Huawei Technologies Co rebounded impressively, increasing its shipments by 42% year over year and capturing a 15.3% market share. This marks four consecutive quarters of double-digit growth for Huawei, driven by the demand for its advanced China-made processors and a wave of patriotic support in the current geopolitical climate.

Also Read: Apple’s AI-Powered Future: iPhone Growth Surge By 2026 With New iPhone 17, AI Integration, Analyst Says

Xiaomi Corp also gained traction, coming in fourth with a 14.8% market share based on a 12.8% shipment increase, fueled by its offerings in both budget and premium segments. Honor, the former sub-brand of Huawei, placed fifth with a 14.6% share, although it faced a shipment decline of 22.5% during the quarter.

The overall Chinese smartphone market, reportedly the largest in the world, grew by 3.2% year on year, reaching 68.8 million units in the third quarter. This marks the fourth consecutive quarter of growth in the sector. IDC analyst Arthur Guo highlighted that this increase is due to a significant wave of device upgrades, which is contributing to the recovery of China’s smartphone market.

This growth is also aligned with China's stimulus initiatives and the upcoming holiday season, which is expected to enhance consumer spending.

In response to market pressures, Apple implemented notable promotional offers for the iPhone 16 in China. These included pre-release discounts available on major platforms such as Alibaba Group Holding's Taobao and Pinduoduo. In anticipation of the Singles’ Day shopping festival, Apple introduced additional price reductions to entice consumers further.

Apple's CEO, Tim Cook, recently visited China, meeting with Jin Zhuanglong, the Minister for Industry and Information Technology. During their meeting, the minister expressed optimism that Apple would expand its presence in the Chinese market and strengthen collaborations with local businesses.

This visit was Cook’s second trip to China in 2024, during which he highlighted experiences visiting local farms and historic areas.

Needham analyst Laura Martin predicts that iPhone sales are likely to account for 89% to 96% of Apple’s revenue by 2025, indicating the continued importance of the iPhone to Apple's overall business strategy.

As a whole, Apple’s stock has experienced a robust increase, climbing 35% over the past year. Investors looking to diversify their portfolios might consider exposure to Apple through various exchange-traded funds like iShares Global Tech ETF and Vanguard Information Tech ETF.

Price Action: As of the latest check, AAPL shares rose by 0.85%, reaching $232.52.

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Photo by Apple

This article was partially produced with the help of AI tools.

Apple, smartphone, sales