The analyst said Apple has lowered its shipments of key semiconductor components, suggesting that shipments of iPhones will drop by 10% to 15%, Bloomberg reported Tuesday (Jan. 30).
Apple did not immediately reply to PYMNTS’ request for comment.
Kuo wrote in a Tuesday post on Medium: “The iPhone faces structural challenges that will lead to a significant decline in shipments in 2024, including the emergence of a new paradigm in high-end mobile phone design and the continued decline in shipments in the Chinese market.”
The new paradigm includes foldable phones and the integration of functions powered by generative artificial intelligence into mobile phones, Kuo wrote. Apple’s declining sales in China are primarily due to a resurgence of rival Huawei and high-end consumers’ desire for foldable phones, he added.
During the first week of 2024, Apple’s iPhone sales in China dropped 30% despite markdowns on several iPhone models in the country.
Jeffries analysts said at the time that they expect the company’s smartphone shipments to continue to drop by double digits in 2024. They also expect China-based Huawei to expand its market share.
Apple’s smartphone shipments to the Chinese market slipped in 2023, but the iPhone remained the most popular smartphone among the country’s consumers.
During the year, Apple boosted its smartphone market share in China from 16.8% in 2022 to 17.3% in 2023. At the same time, smartphone shipments in China dropped 5% compared to 2022 and hit the lowest volume in a decade.
Huawei earned a place among the top-five smartphone companies for the first time in 2023.
Meanwhile, Apple is pushing to bring generative AI to the iPhone. The tech giant quietly made a series of acquisitions, hires and updates to its hardware aimed at adding AI to the next generation of the smartphone.