For years Jobs’ Mob has depended on its iPhone to provide the bulk of its revenue and has been unable to come up with anything new. Its newest AI-driven features have not been well-received. Loop Capital analyst Ananda Baruah described the user experience as disappointing.
It was only a matter of time before that cash cow snuffed it, and it appears that is happening now.
Apple’s iPhone sales in China fell 18.2 per cent in the December-ending quarter. Following this news, Apple's stock price dropped 4.4 per cent, and two analysts downgraded their ratings on the stock.
This follows last year's 11 per cent drop in China iPhone sales in the final quarter of 2023. Apple responded to the decline by cutting iPhone prices by up to $70, but these price cuts have not remedied the underlying issues in the company's China strategy.
Jobs’ Mob’s iPhone strategy remains consistent globally: It sets prices higher than competitors because customers are so stupid they won't notice that there are cheaper and better models out there.
However, this strategy only applies to a small percentage of consumers in markets like China. As noted in a Babson College case study, the majority of buyers prefer local manufacturers that offer lower-priced products with features tailored to local needs.
Lead US Investor Warren Buffett has already dumped 605 million of Berkshire Hathaway’s Apple shares as of last November — and is considering further reducing its company holdings.
Jefferies downgraded Apple from Hold to Underperform, citing weak iPhone sales and general challenges in the consumer electronics market. According to MarketWatch, Jefferies analyst Edison Lee highlighted Apple's higher selling prices compared to Chinese flagship Android models as a significant issue.
Loop Capital also downgraded Apple from Buy to Hold. The firm’s supply chain checks suggested a “material” drop in iPhone demand in the March-ending quarter, with expectations of amplified demand reduction in the following quarters.
Apple’s 18.2 per cent dip in China iPhone sales during the holiday season contributed to a five per cent global decline in the company’s smartphone sales for the quarter. Apple slipped to third place in China’s smartphone market, holding about a sixth of the market.
During this period, Huawei was the leader in China’s smartphone market, with sales increasing by 15.5 per cent. This marks the first time since the US ban that Huawei has regained the leading position.
