iPhone sales drop 5% worldwide
Apple market share slips to 18%
Apple Inc. reported a 5% drop in global iPhone sales in the final quarter of 2024, losing market share to Chinese competitors like Xiaomi and Vivo. The company’s full-year sales declined by 2%, even as the global smartphone market grew by 4%.
Key Takeaways
- Apple’s global iPhone sales dropped 5% in the last quarter of 2024, reflecting intensified competition from Chinese rivals.
- The company’s full-year sales fell 2%, while the global smartphone market expanded by 4%.
- Weak AI integration and feature availability in China have contributed to the decline in market share.
Decline in Global iPhone Sales
Apple experienced a 5% drop in iPhone sales globally during the last quarter of 2024, reducing its worldwide market share to 18%. While Apple struggled, Chinese smartphone makers like Xiaomi Corp. and Vivo captured a larger share of the growing Android device market, reports Bloomberg.
Apple Inc (AAPL) share price dynamics (Jul 2023 - Jan 2025) Source: Investing.com
For the full year, Apple’s sales declined by 2%, despite global smartphone sales increasing by 4%. This decline underscores Apple’s growing challenges in maintaining its competitive edge, as Chinese manufacturers continue to innovate and aggressively expand their market presence.
Challenges in China: Weak Demand and Rising Competition
Apple’s struggles were particularly evident in China, its largest market outside the U.S., where the company faced declining unit sales. However, higher-end models like the iPhone Pro and Pro Max performed better, contributing more than half of Apple’s sales in the region.
Meanwhile, domestic competitors such as Huawei and Honor Device Co. gained traction, supported by their focus on AI integration and in-house technology development. These local brands are capitalizing on the increasing consumer preference for cutting-edge features and affordable pricing.
AI Rollout Delays Impact Sales
One of Apple’s key challenges has been its slow rollout of AI-driven features. The iPhone 16 series, launched in September 2024, introduced Apple Intelligence, a suite of AI tools offering writing assistance and image generation. However, these features have yet to launch in China, as Apple continues to negotiate with local partners to comply with regulatory and infrastructure requirements.
This delay has allowed Chinese smartphone makers to leap ahead, with many already offering robust AI tools and personalized virtual assistants. Analysts have noted that investor expectations for Apple’s AI capabilities may have been overly optimistic, further dampening market sentiment.
Despite the setbacks in China, Apple managed to achieve growth in non-core markets such as Latin America. The company’s focus on premium models in these regions has helped offset some of the losses in its traditional strongholds.
To address its challenges, Apple is expected to double down on AI development and accelerate feature availability across all markets, including China. The company will also aim to maintain its competitive edge by emphasizing its high-margin Pro and Pro Max models while diversifying its global strategy to reduce reliance on key markets.
Reminder, Apple Inc. announced an 18% pay increase for its Chief Executive Officer Tim Cook, raising his total compensation to $74.6 million in 2024, up from $63.2 million the previous year.
