China iPhone gross sales robust, Apple tells traders as Huawei menace looms

Nov 2 (Reuters) – Apple (AAPL.O) stated on Thursday that demand for its iPhones in China was robust, attempting to reassure traders who’re frightened it’s dropping floor to a newly resurgent Huawei Applied sciences (HWT.UL) and different native smartphone makers.

“In mainland China, we set a quarterly report for the September quarter for iPhone,” Chief Government Tim Cook dinner informed Reuters in an interview. “We had 4 out of the highest 5 best-selling smartphones in city China.”

Apple appeared to have gained market share in China within the July-September interval, even when the general smartphone market might have contracted, he stated on a convention name with analysts.

The corporate expects to promote extra iPhones within the vacation quarter regardless of this 12 months’s quarter having one fewer week of gross sales than the prior 12 months’s, Cook dinner stated.

Analysis agency Canalys estimated that general smartphone gross sales in China fell 3% in July-September from a 12 months earlier as customers purchased fewer smartphones as an financial restoration was uneven.

That was slower tempo of decline than earlier quarters, an indication {that a} droop available in the market had eased. Gross sales of iPhones in China fell 6%, Canalys stated.

However, analysts estimate that Huawei’s China smartphone gross sales grew strongly within the quarter. Its Mate 60 Professional telephone has grabbed headlines for utilizing a sophisticated China-made chip regardless of being squeezed for years by debilitating U.S. sanctions.

Apple stated on Thursday that its general gross sales in China dipped 2.5% however it blamed powerful Mac laptop and iPad gross sales for that. Cook dinner stated gross sales there grew after accounting for foreign-exchange charges.

Apple’s gross sales in China have fallen in three of the 4 quarters in its 2023 fiscal 12 months, which ended Sept. 30.

Analysts stated they remained optimistic about Apple’s demand outlook in China by the fourth quarter as there have been indicators {that a} rebound within the broader smartphone market was gathering tempo.

Aggressive discounting on the iPhone 15 collection within the run as much as the annual Singles Day purchasing pageant by main Chinese language on-line retailers can also be encouraging demand.

Though Apple often permits accomplice distributors in China to supply reductions to spur demand, these retailers have additionally been locked in a “worth for cash” battle to win clients.

Over the previous two weeks, platforms together with JD.com (9618.HK), Pinduoduo (PDD.O), and Alibaba’s (9988.HK) Taobao have supplied main offers on iPhone 15 fashions, marking down costs by as much as 1,501 yuan ($205.14) beneath retail.

“Whereas the most recent iPhone collection had underperformed in China within the launch quarter because of a shorter pre-holiday purchasing interval coupled with provide mismatches on the Professional Max, it might see enchancment within the year-ending quarter with a robust 11.11 gross sales occasion efficiency,” analysis consultancy Counterpoint wrote in a word on Friday.

Apple’s feedback adopted optimistic commentary from its chip provider Qualcomm (QCOM.O) on Wednesday, which signaled {that a} two-year-long droop within the smartphone market was easing, led by a restoration in China.

Qorvo (QRVO.O), one other wi-fi connectivity chip provider to Apple, additionally stated stock ranges at their China clients had been slowly falling and that the corporate had recorded its largest bookings quarter in additional than two years.

Qualcomm can also be going through new competitors from Huawei’s chips, however stated on Wednesday it doesn’t anticipate Huawei’s re-entry into the market to have an effect on its relationship with Chinese language smartphone firms.

Our Requirements: The Thomson Reuters Belief Ideas.