iPhone sales plummet

Apple Inc.’s iPhone shipments slid a bigger-than-projected 10% in the March quarter, reflecting flagging sales in China despite a broader smartphone industry rebound.

The company shipped 50.1 million iPhones in the first three months, according to IDC’s preliminary figures, falling shy of an average of analyst estimates compiled by Bloomberg of 51.7 million units for the period.

The Cupertino, California-based company has struggled to sustain sales in the world’s biggest smartphone market since the debut of its latest iPhone generation in September.

The resurgence of Huawei Technologies Co., more domestic competition and a Beijing ban on foreign devices in the workplace have all weighed on sales.

The slump is especially pronounced against the backdrop of the overall mobile market registering its best growth in years.

Smartphone makers shipped 289.4 million handsets in the period, marking a 7.8% rise from the trough of a year ago when many manufacturers were grappling with a surfeit of unsold devices.

Samsung Electronics Co. regained the top spot in the March quarter, while budget-focused brand Transsion increased shipments by 85% and Xiaomi Corp. bounced back to close the gap on second-place Apple.

“The smartphone market is emerging from the turbulence of the last two years both stronger and changed,” said Nabila Popal, research director at IDC.

“While the top two players both saw negative growth in the first quarter, it seems Samsung is in a stronger position overall than they were in recent quarters.”

Prominent Apple suppliers Hon Hai Precision Industry Co., Murata Manufacturing Co., LG Innotek Co. and TDK Corp. fell in early Asia trading on Monday, amid a broader selloff on fears of escalating conflict in the Middle East.

During the pandemic, Apple’s iPhone showed the greatest resilience as consumers pulled back from purchases of smartphones by most of its Android-powered rivals.

That inventory buildup led to aggressive pricing by Chinese competitors like Xiaomi, which took months to exhaust their oversupply and are now starting to ramp shipments back up.

Huawei’s surprise return to prominence last year — with its own made-in-China chip and HarmonyOS operating system on the Mate 60 series — has been eroding Apple’s share of China’s premium market since August.

“Increased competition in China is a big part of Apple’s decline in Q1,” Popal said.

Elsewhere, a number of regions started the year with excess iPhone inventory after heavy shipments in the final months of 2023, she added.