Apple's March iPhone Sales in China Jump 12% After Price Cuts

Key Takeaway

• Apple's iPhone shipments in China surged 12% in March after price cuts, reversing a 37% decline from the first two months of 2024.
• The strategic price reductions have effectively countered competition and unofficial restrictions, boosting sales in a key market.
• Apple's focus on diversifying its product line with new iPad launches aims to reduce dependency on iPhone sales amid competitive challenges.

iPhone Shipments Surge in China

Chinese iPhone shipments saw a significant increase of approximately 12% in March, as reported by official data, following price reductions by Apple Inc. and its retailers. This development indicates a positive shift in Apple's efforts to mitigate a declining trend in its sales within the Chinese market. The data, derived from the China Academy of Information and Communications Technology, highlights that shipments of foreign-branded smartphones, predominantly Apple's iPhones, escalated to 3.75 million units in March from the previous year. This rebound contrasts sharply with a 37% decrease observed in the first two months of 2024, showcasing a notable recovery in demand for Apple's flagship product.

Price Cuts and Market Response

In response to a challenging market environment characterized by stiff competition from local manufacturers like Huawei Technologies Co. and an unofficial restriction on iPhone usage within state agencies and firms, Apple initiated price cuts at the beginning of 2024. This strategic move, coupled with Apple's surprise beat on quarterly revenue from China, suggests that the price adjustments have been effective in reviving interest and sales of the iPhone in a market that is crucial yet increasingly competitive for Apple. Tim Cook, Apple's CEO, during an analyst call, confirmed the growth of iPhone business in mainland China "on a reported basis," attributing it to the company's unwavering commitment to the Chinese market, which still represents 18% of Apple's net sales despite its contraction.

Apple's Strategic Focus and New Launches

Investors and market analysts closely watch Apple's performance in China, given the country's significance not only as a major market but also as a key global manufacturing hub for the iPhone. Beyond striving to stabilize and grow its market share in China, Apple is also exploring avenues to invigorate other product lines as part of its growth strategy. The recent unveiling of a new iPad Pro and a larger iPad Air exemplifies Apple's efforts to refresh its product portfolio and stimulate growth across different segments. These launches are part of Apple's broader initiative to diversify its revenue sources and reduce its dependency on the iPhone, especially in markets where competition and regulatory challenges persist.

Management Quotes

• Tim Cook, CEO of Apple:

  "The iPhone business in mainland China grew on a reported basis."