Apple's iPhone shipments to China fell by a third (35%) in November, while trade difficulties in the country continued. China has been a major source of growth in recent years as iPhone demand helps offset market challenges in other parts of the world. However, strong competition from local suppliers such as Huawei, combined with a slowdown in the economy, led to lower revenues.
Chinese iPhone
In fact, the launch of the cheaper iPhone 11 earlier this year has failed to generate the same level of fanfare as previous models. The new figures, cited by Credit Suisse and based on data from China's Ministry of Industry and Information Technology, suggest a second double-digit decline in as many months. Chinese consumers are extremely price conscious and brand loyalty is low. This means that competitively priced, feature-rich phones have caused problems for the iPhone, which has become more expensive over time. The lower cost of the iPhone 11 was an acknowledgment of these issues, not just in China, and was a hit in the West. As market saturation continues, Apple has placed heavy emphasis on services, such as Apple Music and Apple TV+, to increase revenue. Apple could also be affected by US tariffs on Chinese products. Devices like the iPhone have "Designed by Apple California, assembled in China" on the back, meaning the cost of the Cupertino-based company's products would be affected. Trump introduced several tariffs last September, with Apple breathing a sigh of relief after its most important products - iPhone, Mac, Apple Watch and accessories - were excluded. However, a new price range is expected to come into effect this month, which could increase the cost of these goods by 15%. Via Reuters