Chinese iPhone demand is more stable than expected

Declining iPhone sales in China have been portrayed as a key one of the many pressures on Apple. The decline is significant enough that Tim Cook even had to spin the figures a little in the latest earnings report.

Then generally, investors have predicted that problems in China are increasing — but also that there are signs of potential recovery. Now investment firm TD Cowen, in a note seen by AppleInsider, paints a picture of the Chinese market stabilizing.

The analysts say that most smartphone manufacturers, including Apple, have seen forecasts remain steady. Samsung and Huawei are doing better, with TD Cowen saying that their "targets increased modestly."

Overall, the analysts expect a 4% growth in the Chinese smartphone market across 2024 and 2025. So it's not a gigantic recovery, but after years of decline, it's a significant improvement.

TD Cowen does note that there are still economic problems in China, and also that current shipping figures look better year over year chiefly because the iPhone 14 range had production problems in 2022/23.

Then, too, there is a seasonal decline as the current iPhone 15 range is now just over halfway through its first year. Plus upgrade cycles appear to be lengthening, which is increasingly significant as the market of buyers entirely new to smartphones is not increasing.

Nonetheless, TD Cowan says that with Apple, the introduction of AI with the iPhone 16 range means upgrades will accelerate. With Android phones, there is already a clearer return to the sales figures from before the last two particularly tough years.

TD Cowen stands by its previous prediction that Apple will have sold 48 million iPhones by the end of the March quarter. It says for the June quarter, it will be down to 39 million.

Separately, it's been assumed that Apple will make its use of AI more prominent in the forthcoming iOS 18. But now it's believed possible that the company will introduce an AI App Store too.