Signs of weak demand for Apple's most current iPhones are being noticed by analysts and investors one month after their release, compared to the same period last year.
Analysts and investors are beginning to observe indications of weakened demand for Apple's newest iPhones in China compared to the same models last year. According to Counterpoint Research, sales of the latest iPhone 15 dropped by 4.5% within 17 days of their release. Furthermore, unit sales of the Pro Max and Pro decreased by 14% and 11%, respectively, compared to a year ago. Additionally, brief shipping times on Apple's website could potentially allude to either dwindling demand or an ample supply. Jeffries analysts have noted that "weak demand" in China has resulted in the iPhone maker failing to maintain the smartphone market share lead in the nation.
This sluggish start in China, Apple's third-largest market after North America and Europe, follows a few news stories that have caused some analysts to worry about the company's prospects in the country. With the loosening of US trade restrictions, Huawei has re-entered the high-end smartphone market in China. The headlines of certain Chinese government agencies banning iPhones for work last month also raised doubts about the brand's status in the region.
In response, Apple CEO Tim Cook has made two trips to China this year. During his current trip, he is visiting Apple stores, suppliers, and Chinese authorities, and Apple has unveiled a new iPad model adapted for Chinese networks.
Though difficult for all smartphone vendors, the market in China is particularly challenging due to macroeconomic worries. According to Jeff Fieldhack, director of Counterpoint Research, Apple's sales in China could be down by about five percent, with the whole market down by the same amount. Nonetheless, Fieldhack noted that robust demand in the US has partially made up for the dip in Chinese sales.
Investors are fervently awaiting news of Apple's growth this holiday season after three consecutive quarters of faltering overall sales. Reports from Apple back in July signaled the possibility of a continued slump in the quarter ending Sept. 30. On Nov. 2, Apple will divulge its September quarter figures, and executives may offer some data on how the holiday quarter is progressing and whether it's starting to rise again. The holiday period is Apple's hectic time of year, with the September quarter only containing a brief few days of sales for the brand-new iPhones.
Analysts are consulting shipping times on Apple's website – the number of days required for a new iPhone to arrive – as a means of guesstimating demand. These periods are shorter than they were a year ago, mainly in China, in accordance with recent analyst notes from UBS, JP Morgan, and Bank of America. Bank of America researchers are saying the lessened shipping times are caused by a betterment in supply, instead of a shrinking in demand. Although, Morgan Stanley analyst Erik Woodring asserted that the bank is cutting its December quarter estimates and stock target price due to what they think is limited supply that will push some iPhone sales to the first quarter of 2024.
Adding to the disquiet among investors is the fact that Apple's other products won't make up any shortfall of iPhones. The Mac and iPad collections have yet to receive a major refreshment this year. Introduction of new models commonly causes a surge in demand, but the Chinese iPad declared this week was a minor upgrade. TFI Securities analyst Ming-Chi Kuo has remarked that MacBook sales in 2023 could drop as much as 30% compared to last year.
An inference of how well Apple is performing in China could be deduced from the outcome of "Singles Day" on November 11, where iPhone prices may be slightly cut in order to increase sales. "That's a major deal. They will do a lot of sales and that will be an excellent harbinger of what the Q4 will be in China," Fieldhack commented.
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