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Apple’s (AAPL) global iPhone shipments fell nearly 10% in the first quarter despite a broad recovery in the smartphone market as the company continues to battle rising challengers from China such as Xiaomi did.
According to market intelligence firm IDC, Apple’s first-quarter shipments decreased by 9.6% year-on-year, from 55.4 million units in the first quarter of 2023 to 50.1 million units in the first quarter of this year. The company’s overall global market share also fell from 20.7% to 17.3%.
Apple stock was down less than 1% on Monday morning.
Apple wasn’t the only company to face headwinds in the quarter. Samsung, the world’s largest smartphone maker, also saw its shipments decline, albeit by just 0.7%.
“The smartphone market has overcome the turmoil of the past two years and is emerging stronger and changing,” IDC Research Director Nabila Popal said in a statement.
“First, value and average selling price (ASP) growth continues as consumers choose more expensive devices knowing they will own them longer. Second, the top five companies continue to grow in value and average selling price (ASP). There has been a shift in power between them, and will likely continue as market players adjust their strategies in a post-recovery world.”
Apple remains the world’s second-largest smartphone maker in terms of shipments after Samsung, but Chinese companies such as Xiaomi and Transsion are gaining momentum in the market. Xiaomi’s shipments in the quarter increased by 33.8% to 40.8 million units, while Transsion’s shipments increased by 84.9% to 28.5 million units.
Apple’s China operations have been a thorny issue for the company over the past two quarters. iPhone sales fell 13% in the first quarter of this year and are expected to decline again when the company releases its second-quarter results on May 2.
China is Apple’s third largest market after the Americas and Europe, making the region particularly important to the company’s success.
Ongoing geopolitical tensions between the United States and China are also adding to Apple’s difficulties. According to Bloomberg, Chinese authorities are increasingly telling employees not to use iPhones or other foreign-made cell phones in the office.
Apple is also moving away from China as a major manufacturing hub. The company is increasingly looking to hand over much of its manufacturing capacity to Vietnam and India. CEO Tim Cook on Monday posted a series of photos of himself in Vietnam on X, formerly Twitter.
Apple has faced a series of challenges, from declining sales of iPads and wearables to a Justice Department antitrust lawsuit that claims Apple is intentionally working to stifle competition in the smartphone space. There is. The European Union’s European Commission also fined the company $2 billion related to antitrust concerns regarding streaming music. The tech giant also faces a potential $1 billion lawsuit in the UK related to the fees it charges developers who sell apps through the App Store.
Apple stock has been in a slump since the beginning of this year, with shares down more than 8% since January. The company’s stock is up just 6% over the past 12 months, compared to the S&P 500 index, which is up more than 20%.
However, things could start to improve for the company later this year. Apple is widely expected to announce some form of generative AI-based functionality at his WWDC developer conference in June. If Apple introduces this technology in new and interesting ways, it could increase sales of iPhones, iPads, and Macs.
Still, it’s unclear exactly what Apple will offer in terms of generative AI, and there’s no guarantee it will be a huge success. Google (GOOG, GOOGL) and Samsung have already started rolling out this technology in their smartphones, but it’s mainly aimed at photo manipulation and quick translations.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter @Daniel Howley.
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