Apple iPhone Pushed Out of China’s Top 5

Apple has been having a challenging time in regard to China lately. In the June quarter, iPhone shipments in China fell by 3.1%, leaving Apple out of the top five handset makers in the country for the first time in four years. Meanwhile, there’s been an 11% rise in Android shipments mainly due to a struggling economy, increasing discounts by smartphone retailers, and renewed competition from domestic brands like Huawei.

This is not the first time Apple has struggled thanks to China. In March, Apple agreed to pay $490 million to settle claims that CEO Tim Cook misled investors about a decline in iPhone sales in China. The lawsuit, filed in Oakland, California, alleged that Apple inaccurately reported the performance of iPhones released in September 2018.

In November 2018, Cook reported strong sales for the new iPhones, but in January 2019, Apple warned that revenue would fall below expectations due to weak demand in China. This led to a 10% drop in stock price and a loss of over $70 billion in shareholder wealth.

Although Apple denied wrongdoing, it settled after more than four years of legal battles to avoid further issues. The settlement, which required approval from U.S. District Judge Yvonne Gonzalez Rogers, would compensate shareholders who bought Apple stock in late 2018, though the final amount would be less than $490 million after legal fees. Attorneys planned to seek up to $122 million of the settlement.

In May 2024, iPhone shipments in China surged by 40%, according to data from the China Academy of Information and Communications Technology, significantly outpacing the overall smartphone market’s 13% growth. This increase followed a 50% rise in April, indicating a strong recovery for Apple in its key market outside the U.S.

Apple’s aggressive price cuts and new promotions, aimed at boosting sales before China’s June 18 shopping festival, were crucial in driving this growth, despite potential impacts on profit margins.

Earlier in the year, global iPhone shipments had declined by 10%, largely due to economic challenges and fierce competition from local brands like Huawei in China. Despite these difficulties, Apple’s stock rose 13% this year, bolstered by improved prospects in China and a new partnership with OpenAI.

Apple’s latest earnings report showed significant revenue from Greater China, totaling $16.4 billion, but this was an 8% decrease from the previous year, compared to a 4% decline in overall revenue.