Apple is facing continued challenges in China, one of its most critical markets, as the company’s Q124 sales in the greater China region in the December quarter fell nearly 13% YoY to $20.8 billion. (Of note: Q124 contained 13 weeks vs. Q123’s 14 weeks.)
China was once seen as the major growth driver for the company but last year, cautious consumer sentiment combined with intense competition, in particular from a rejuvenated Huawei, posed a challenge to the Cupertino, California-based giant. And in 2024 it may not get any better.
“Two key factors were holding Apple back in 4Q23 — a more cautious and rational spending sentiment and the challenge from Huawei which created more buzz in the market than the new iPhone 15 series,” Will Wong, senior research manager at IDC, told CNBC.
MacDailyNews Take: Again, Huawei’s overhyped claim to fame is the Mate 60 with a “Kirin 9000s” chip that’s generations behind Apple. The Kirin 9000s is a 7nm chip that has a Single-Core Score of 1267 and a Multi-Core Score of 3533 in Geekbench 6 benchmarks. Apple’s A17 Pro is a 3nm chip that has a Single-Core Score of 2902 and a Multi-Core Score of 7221 in Geekbench 6 benchmarks.
It’s not even close. It’s a 2019 Toyota Yaris vs. a 2023 Bugatti Chiron Super Sport sort of affair. It’d be a joke if it weren’t so sad.
Huawei’s flagship phone, the Mate 60, is trounced by Apple’s entry-level iPhone SE (third generation) which offers the 5nm A15 Bionic launched in September 2021 (Single-Core Score: 2237, Multi-Core Score: 5173 in Geekbench 6 benchmarks).
Plus, Huawei’s slow outmoded crap is hobbled with HarmonyOS (which is very likely in perfect “harmony” with Chinese Communist Party surveillance).
It is not just Huawei that is challenging Apple. Other domestic brands from Xiaomi to Oppo have been slowly pushing into the high-end market but at cheaper prices.
MacDailyNews Take: Android phones are not “high-end.” Android phones are derivative, slow, cobbled together from off-the-rack parts; hodgepodges, and are insecure privacy, user-tracking nightmares. But, to be fair, that does sound very Chinese Communist Party through and through.
Last year, the Chinese economy faced a number of challenges from collapses in its property sector to weak consumer demand.
These challenges could continue into 2024 and affect consumer confidence.
And like many foreign technology firms operating in China, the specter of geopolitics constantly hangs over.
Bloomberg, citing people familiar with the matter, reported last year that China has extended a ban ordering staff at government agencies and state-backed firms to stop bringing iPhones and other foreign devices to work.
MacDailyNews Take: China is a problem. China has always been a problem. China will always be a problem.
Tim Cook, seemingly very high on hopium, thinks China is just swell*. That’s Apple’s biggest problem.
I remain very optimistic about China over the long term. – Apple CEO Tim Cook, February 1, 2024
*Or he’s lying, trying to fool China while he belatedly moves as much of Apple’s production out of China and into India, Vietnam, etc. as he can. Either way, Apple’s biggest problem is China and the CEO who painted the company into this corner.
See also: Tim Cook firmly latched Apple onto China’s CCP teat. What’s his plan for weaning it off? – November 2, 2022
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Tim Cook did exactly what he needed to do when Apple were trying to expand sales in China. That took time, and so will gradual extrication from the Peoples Republic. Give the guy a break. He’s been a great CEO.
Cook’s Apple should be worth at least $1 trillion more than Microsoft right now, but, instead, Apple is today worth less than Microsoft.
A moron could have run Apple reasonably well having what Steve Jobs set up for them. That’s just what this moron Cook did.
Apple deserves a visionary CEO, not a bean-counting caretaker who’s more concerned with “Climate Change” and “Racial Equity and Justice Initiatives” than freeing the company from the CCP shackles into which he personally placed it.
Question if you have been a shareholder to any degree or amount of time. During Cook’s stewardship my stock has generated huge growth. I guess when you say a moron could do what Cook has done you are referring to yourself. Buffet has massively invested in AAPL, guess he is not as smart as you either.
This such and IGNORANT post!!!!
Hey MDN, take it easy on “Hopium”. It’s my favorite drug. Especially the “two more weeks” version.
Doing business with a criminal state (CCP) is never a good thing no matter how much it pads your insanely great 38% profit margin. I thought Tim’s Apple computer was about making the world a better place. You can hide the evidence through sub contractors but at the end of the day Apple continues to enable and profit along side a political state power that has perfected ethic genocide and slave labor on minority populations inside Chinas ever growing boarders.
Apple should end all business/sales with the CCP and take a massive hit, but China needs Apple more than Apple needs China. The detox off China will be uncomfortable for Apple. but going forward they can rebuild & partner with democratic markets with shared values. In a few years they would overcome the addiction and actual gain favorable with likeminded consumers willing to pay more for ethically sourced electronics. apple go ahead and build a mostly automated robot factory anywhere that is not a Marxist police state. Heck the Vision Pro and iPhone BTs commercials shows all the robots and automation apples uses in production of these devices. Does Apple need to relay on “cheap labor”. Is it wise for Apple to tool up factories and information systems to build products when much of that expertise will find its way into state owned companies. Do we really think that the China Smart phones would be remotely competitive with Apple if the CCP didn’t force the transfer of IP and Apples manufacturing blueprint. Unplug Apple’s brain trust from China and in a few years they would be clueless on matching apples innovation. Or something
Round peg in a square hole delineates one of the two Apple’s CEO’s (of matter). I’d say the one would be much more capable with invention and COULD be great with EPS. The strength of the other would be mostly the opposite. In the case of Cook, he tips proportionally downward towards invention in comparison to Job’s “lesser” business mindset (a grand entrepreneur, tho). Re: co endurance; invention–if one has that strength–would position a company better in the long run, as money management is easier to hand off…as it fits the strengths of a broader demographic. Plus, Cooks gets lost in A LOT of non-business focus. His diversions within the “woke” realm and this focus have shown to be a tangible cost…with contemp examples. Maybe Cook hasn’t stuck his neck out as far and, or he/Apple enjoys the teflon effect? Per a period of EPS, Cook “wins” as CEO. For endurance and legacy, I’ll take Job’s any day. Morgan Housel (highly reco his books and ck out this excellent podcast: https://podcasts.apple.com/us/podcast/we-study-billionaires-the-investors-podcast-network/id928933489?i=1000643008399) postulates the strength of a co, isn’t so much the numbers, but the story related that influences the #’s and the company (paraphrase). We know Jobs ability to tell a story. He keynotes were legendary. The “reality distortion field” testifies to his well-known story telling power that influences I know, being a great story teller isn’t $$ in the bank, but it speaks GREATLY of a vision and the likelihood of drawing others in to materialize the story.
Cook delivers a banal and dull story. I actually have a hard time thinking what story he delivers? He seems more authentically excited about being carbon neutral and supporting certain cultural concerns. Obversely, his “excitement” for the company and products seems mostly perfunctory, self-conscious and nondescript.
A shareholding that’s happy with the “AAPL bank,” nonetheless.
The comments are missing the point. Apple introduced a new world changing product and a record holiday quarter earning, with one less week to count their money. Of course no one can find a reason to use the Vision Pro and Apple has to be punished for China’s economic woes. This is the tradition. Investors get spooked by analysts who act like the price of 3500 for a souped up computer (It’s not a VR device), with never before seen tech is lacking because it only launched with 600 native apps and many times more convertible apps from the iPad. No one will buy it, but it’s sold out for months. There were only 80,000 units ready for launch, except it sold an estimated 180,000 units on launch. This script is laughable and I don’t know why MacDaily News is buying into the bullshit narrative that has happened in the exact same way and with many of the same complaints about iPod, iPhone, iPad, Apple Watch and now Vision Pro. Who would buy this crappy new device. I would, and I did. All of the naysayers, especially those of you who don’t have one will be proven just as wrong this time as all the others. Instead of bitching about why this will be a fail, take a look at the tech this is ushering in for all computer users. Oh yeah, that. Apple’s new products always spawn a bunch of copycats. Finally, why would a company be punished for pulling off a record quarter in the face of one of their major markets going into major economic decline. This is something to be praised and held up as a model. Snap out of it!
“China is a problem. China has always been a problem. China will always be a problem.”
MDN is right. It’s really not that complicated – China is hitting a wall, suffering from a massive recession. Of course a developing country in a recession is not going to be a driver of iPhone sales. Sucks for Apple but hopefully China can recover in the coming years.
This is a China problem, not an Apple problem. Many western companies are trying to exit China ASAP because of Xi Jinping’s rhetoric regarding Taiwan. There’s nothing that Apple could have done anything differently to improve the China situation. China will be a problem for any company that has any dealings with China until Xi Jinping stops with the threats.
Apple should move its business to Taiwan if not back to the U.S.
Yeah they’re gonna sell a lot in china,..wait isn’t a LOT of people unemployed there? Yeah they’re gonna have a lot of money to spend on this wasteful thing. They can’t even take out 1000yuan without a excuse to the bank. Think they’re gonna spend $3500 on this or save it for food and home payments? hmm.