Apple cuts iPhone shipments over reduced China demand

Apple's iPhone shipments in 2024 will drop compared to 2023, analyst Ming-Chi Kuo forecasts, with a significant decline caused in part by lower shipments to China.

Apple is having trouble in China, with reports of local sellers overtaking the iPhone in the market. It now seems that the problems in China are going to affect Apple's overall shipments for the year.

In a Tuesday Medium post, TF Securities analyst Ming-Chi Kuo cites a supply chain survey that determined Apple lowered its orders for key semiconductor components to be used in the iPhone 15 and iPhone 16 generations.

The decline can be between 10% and 15% per half year of 2024, Kuo writes. Overall, this would amount to a total shipment count of 200 million units, which Kuo says would be down 15% year-on-year if proven true.

As to why the shipment count is dropping, Kuo proposes that it's due to a shift towards smartphones with generative AI elements and foldable designs in the high-end market. Kuo also blames the return of Huawei in the Chinese market.

While Samsung has allegedly revised its shipment forecast for iPhone 15 models in the first half of 2024, Samsung has instead increased its Galaxy S24 shipments by between 5% and 10%. This is apparently because of a higher-than-expected demand for the range and its generative AI functionality.

Apple's weekly shipments in China have also declined by 30% to 40% in the last few weeks. Kuo is expecting that trend to continue in the face of competition from Huawei and foldable options in China.

Kuo believes that Apple won't be introducing iPhone models that revamp the design and offer more of an AI-forward approach until 2025. Apple is also rumored to be bringing out the iPhone Fold in the same year.

During Apple's Q1 2024 financial results release and conference call, the company's top executives warned that the second quarter results could be tougher than initially expected.

Kuo's comments arrive at the same time as discussion from Wedbush analysts about the iPhone maker.

Wedbush told investors that it was maintaining its price target for Apple despite multiple problems, ranging from the iPhone in China to the cancellation of the Apple Car. It said that the pent-up demand for the iPhone 16 will help override any current concerns.