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Apple’s (NASDAQ:AAPL) iPhone shipments in 2024 are likely to decline significantly by about 15% year-over-year due to structural challenges, said TF International Securities’ analyst Ming-Chi Kuo in a post.
The company’s stock was down by about 2% on Tuesday.
The analyst’s latest supply chain survey indicates that Apple has lowered its 2024 iPhone shipments of key upstream semiconductor components to about 200M units (down 15% year-over-year).
The tech giant may have the most significant decline among the major global mobile phone brands in 2024, the analysts said in a post on Medium.
The iPhone 15 series and new iPhone 16 series shipments would fall by 10% to 15% year-over-year in the first half of 2024 and the second half of ’24, respectively, versus iPhone 14 series deliveries in in the first half of 2023 and iPhone 15 series shipments in the second half of 2023, respectively.
Ming-Chi Kuo said that the iPhone faces structural challenges which will lead to a significant fall in shipments in 2024, including the emergence of a new paradigm in high-end mobile phone design and the continued dwindling in shipments in the Chinese market.
The new high-end mobile phone design paradigm includes AI (generative AI) and foldable phones. The main reason for the decline in the Chinese market is the return of Huawei and the growing fondness for foldable phones among high-end users as their first choice for phone replacement, the analyst noted.
In addition, the analyts said that Samsung (OTCPK:SSNLF) has updated the shipments of the Galaxy S24 series in 2024 upwards by 5% to 10%, gaining from the better-than-expected demand due to high integration of GenAI functions. Meanwhile, Apple has trimmed down the shipment forecast of iPhone 15 in the first half of this year.
The analyst noted that Apple’s weekly shipments in China have tumbled by 30% to 40% year-over-year in recent weeks, and this downward trend is anticipated to continue. The main reason for the decline is the return of Huawei and growing preference for foldable phones by high-end users in the Chinese market.
The analyst added that it is expected that Apple would not launch new iPhone models with significant design changes and the more comprehensive GenAI ecosystem/applications until 2025 at the earliest.
Until then, it will likely harm iPhone shipment momentum and ecosystem growth, according to the analysts.
Last week, research firm IDC had said that fourth-quarter iPhone shipments in China had declined 2.1% year-over-year. However, the tech giant took home the crown of 2023’s largest phone seller in the country. For 2023, Apple overtook Vivo, however, analysts expect that the company’s sales will come under pressure again in 2024.
IDC had noted that Apple’s high-end market share in China has been affected by rival products and limited product upgrades by Apple which has lowered the overall charm of the iPhones.
Apple has been facing competition from Chinese rivals such as Huawei Technologies and Xiaomi (OTCPK:XIACF) (OTCPK:XIACY) in the smartphone market.
Huawei’s shipments had increased 36.2% in the fourth quarter of the year, as per IDC.
Earlier this month, it was reported that Chinese e-commerce companies Alibaba (BABA) and JD.com (JD) were offering steeper discounts on iPhones, even more than Apple, (AAPL) ahead of the Chinese Lunar New Year.
Meanwhile, Jefferies’ analyst noted that Apple’s Chinese iPhone sales had dropped 30% in first week of 2024, compared to the same period a year ago. Jefferies expects iPhone’s volume in China would fall by double digits this year.
