According to Jefferies' industry checks, Apple’s (AAPL) iPhone experienced a year-over-year decline of over 30% recently.
Jefferies estimates that the iPhone in China exited 2023 with approximately a 3% decline and a 0.4 percentage point lower market share.
“iPhone's lower market share YoY in China is a negative surprise, and we believe the cannibalization is coming from not just HW, but also Xiaomi and "others" (eg, Samsung, ZTE/Nubia etc.),” analysts said in a client note.
“Going into January, we believe the high base last year (2023) would translate into more pressure on YoY growth. This will especially apply to iPhone, since iPhone vol in Jan 2023 grew HSD YoY and > 40% sequentially.”
Apple (NASDAQ:AAPL) stock fell about 0.3% in pre-market Monday trade.
On the other hand, Android+HW (Android with hardware) managed to stay flat YoY recently against a high base.
In 2023, HW gained the most market share, according to analysts. Android was followed by "others" and Xiaomi. However, the analysts suggest that HW's shipment, estimated at around 35 million, is still below the consensus of 40 million, likely due to supply constraints.
The tracking data also indicates a significant rise in discounts for iPhone 14/14+ and a moderate increase for iPhone 15 Pro/Pro Max.
“We believe the heavy discounts on 14/14+ could potentially depress Apple's ASP in China, while its vol was not growing. We also forecast iPhone's vol in China would fall by DD in 2024. Therefore, we expect Apple to have even higher revenue pressure in China in 2024,” analysts concluded.