Apple Inc. AAPL is experiencing a drop in its market share in China. This decline is attributed to a decrease in iPhone shipments, as reported by supply chain analyst Ming-Chi Kuo.
What Happened: Kuo, an analyst at TF Securities, revealed that Apple has been “cautious” in discussing its 2025 iPhone production plans with key suppliers. Despite the expected launch of the new iPhone SE 4, Kuo forecasts a 6% year-over-year decline in shipments for the first half of 2025.
He also expects Apple’s market share to continue to decline, attributing this to the thin design of two upcoming iPhone models, which may only support eSIM, a feature not widely promoted in the Chinese market.
“These two models could face shipping momentum challenges unless their design is modified,” he said.
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In December, while overall smartphone shipments in China remained stable year-over-year, iPhone shipments saw a decline of 10% to 12%. Kuo pointed out that Apple’s on-device artificial intelligence feature, Apple Intelligence, has yet to drive hardware upgrades or boost services revenue.
For 2024, Apple’s estimated iPhone shipments were around 220 million units, with projections for 2025 ranging from 220 million to 225 million, falling short of the market consensus of 240 million or more, according to Kuo.
Why It Matters: This news comes in the wake of a series of challenges for Apple. Earlier in the month, an analyst downgraded Apple from Neutral to Sell and lowered the price target from $202 to $188. MoffettNathanson analyst Craig Moffett cited the lack of traction for iPhone 16 models featuring artificial intelligence and ongoing geopolitical tensions with China.
Apple also reached a $95 million settlement in a lawsuit regarding allegations of unauthorized Siri recordings. After the Siri privacy policies lawsuit, the company clarified that it has never sold or used Siri data for marketing purposes.
Despite these controversies, Apple’s CEO Tim Cook saw a significant increase in his annual compensation in 2024. Cook’s total compensation for 2024 rose by 18% from the previous year, reaching $74.6 million, the company said in a proxy filing on Friday.
Price Action: On Friday, Apple’s stock saw a 2.41% decrease, according to Benzinga Pro data.
Apple has a consensus price target of $245.17, according to 30 analysts tracked by Benzinga The most recent ratings, issued by MoffettNathanson, Bernstein, and B of A Securities on Jan. 7 and 3, 2025, suggest an average price target of $234.67, implying a slight downside of -0.99% based on these assessments.
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