Apple's iPhone shipments slide 10% as sales in China lag rivals

New data provides the first snapshot of the global performance of Apple’s most important product ahead of earnings on May 2

The company shipped 50.1 million iPhones in the first three months of the year, according to market tracker IDC, falling shy of the 51.7 million average analyst estimate compiled by Bloomberg

Apple's iPhone shipments slid a worse-than-projected nearly 10% in the three months to the end of March, reflecting flagging sales in China despite a broader smartphone industry rebound.

The company shipped 50.1 million iPhones in the first three months of the year, according to market tracker IDC, falling shy of the 51.7 million average analyst estimate compiled by Bloomberg. 

The 9.6% year-on-year drop is the steepest for Apple since covid lockdowns snarled supply chains in 2022, the researchers said.

The iPhone maker has struggled to sustain sales in China since the debut of its latest model in September. The resurgence of rivals from Huawei Technologies to Xiaomi, and a Beijing-imposed ban on foreign devices in the workplace have all weighed on sales. 

The IDC data provides the first snapshot of the global performance of Apple’s most important product ahead of earnings on May 2. 

The drop in iPhone shipments is significant given the overall mobile market registered its best growth in years. Smartphone makers shipped 289.4 million handsets in the period, marking a 7.8% rise from the trough of a year ago, when many manufacturers were grappling with a surfeit of unsold devices. 

Samsung Electronics regained the top spot in the March quarter, while budget-focused Transsion increased shipments by 85% and Xiaomi bounced back to close the gap on second-place Apple.

“The smartphone market is emerging from the turbulence of the last two years both stronger and changed,” said Nabila Popal, research director at IDC. 

“While Apple has been super resilient and seen a lot of growth in shipments and share over the last few years, it will be a challenge for it to maintain the pace of growth and the peak share it saw in 2023. As the market recovers further in 2024, IDC expects Android to grow much faster than Apple,” the director said. 

Xiaomi’s handset shipments of 40.8 million units in the first three months jumped 33.8% year over year, according to IDC, while both Apple and Samsung declined. 

"Its strong handset sales were likely driven by a recovery in its overseas market and might lead to high-teens sales growth in the first quarter," said Steven Tseng and Sean Chen, analysts at Bloomberg. 

During the pandemic, Apple’s iPhone showed the greatest resilience as consumers pulled back from purchases of smartphones by most of its Android-powered rivals. 

That inventory build-up led to aggressive pricing by Chinese competitors like Xiaomi, which took months to deplete stocks and are now starting to ramp shipments back up. 

Huawei’s surprise return to prominence last year — with its own made-in-China chip and HarmonyOS operating system on the Mate 60 series — has been eroding Apple’s share of China’s premium market since August.

“Increased competition in China is a big part of Apple’s decline in Q1,” Ms Popal at IDC said. Elsewhere, a number of regions started the year with excess iPhone inventory after heavy shipments in the final months of 2023, she added. 

Average selling prices for handsets are rising, as consumers increasingly opt for premium models that they intend to hold on to for longer, IDC’s researchers found. 

Apple, which consistently maintains the highest ASP in the industry, has led the way in this, with consumers showing a distinct preference for its higher-tier models. 

• Bloomberg