2024-04-20 13:25:12
apple has lost its spot as the world’s top phone maker to Samsung, with the American tech company trailing the Korean brand in terms of shipments and market share.
“Global smartphone shipments increased 7.8% year over year to 289.4 million units in the first quarter of 2024,” according to an April 15 press release from International Data Corporation (IDC). Samsung was the top phone maker in the first quarter, with shipments of 60.1 million units, down from 60.5 million last year. Apple comes in second with 50.1 million units shipped, compared to 55.4 million last year. “While Apple managed to take the top spot at the end of 2023, Samsung confirmed its position as the leading smartphone vendor during the first quarter,” said Ryan Reith, vice president of Worldwide Group and Consumer Device Trackers at IDC.
“IDC expects these two companies to maintain their hold on the high end of the market, but the resurgence of Huawei in China, as well as notable gains from Xiaomi, Transsion, OPPO/OnePlus and Vivo are likely to motivate both OEMs to look for areas of expansion and diversification, he adds.
Although Samsung and Apple held the top spots, their market share fell, according to IDC data. Samsung’s market share fell from 22.5% in the first quarter of 2023 to 20.8% in the first quarter of 2024. Apple’s share fell from 20.7% to 17.3%.
Of the other three brands monitored by IDC, OPPO saw its market share drop slightly. On the other hand, the market shares of Xiaomi and Transsion increased, with the latter recording the largest increase.
Nabila Popal, research director at IDC’s Worldwide Tracker, believes the smartphone market has developed after the “turmoil” of the past two years.
“First, we continue to see growth in value and average selling prices as consumers choose more expensive devices, knowing they will keep them longer. Second, there is a shift in power between the top five companies, which is expected to continue as market players are adjusting their strategies in a world of economic recovery, she explains.
“While the two major players, Samsung and Apple, both experienced negative growth in the first quarter, it appears that Samsung is in a stronger position than in recent quarters. »
Declining market share and shipments could be a red flag for Apple. Although the company’s first-quarter profit beat analysts’ estimates, a 13% drop in sales in China cast a shadow over the technology company.
Apple also faces regulatory challenges in the US, with the Justice Department filing an antitrust case against the company last month. As a result of this lawsuit, Apple’s market value fell by approximately $113 billion.
The technology giant has also been subject to a number of downgrades. In January, Barclays upgraded the stock from equal weight to underweight, and set a price target of $160. Piper Sandler downgraded Apple to neutral.
Equity research firm Redburn Atlantic also lowered its rating to neutral, citing regulatory headwinds as one of the reasons for the downgrade. She maintained her price target at $200. Apple stock was trading at $172 at 10:18 a.m. EST on April 16, down 7.4% year to date.
The impact of China
According to a report by technology research firm Counterpoint, while overall smartphone sales in China fell 7% year-on-year in the first six weeks of the year, Apple was found to be the worst student.
The US tech giant’s sales growth fell by 24% during this period. This is a big problem for Apple, as China is an important market for the technology company.
By 2023, the combined markets of China, Hong Kong and Taiwan accounted for nearly 20% of the company’s total sales. Therefore, a significant decline in sales in this region has a significant impact on Apple’s revenue and profitability.
Several factors have been cited to explain the sudden drop in sales. “First, the company faced strong competition at the high end from a resurgent Huawei, while being crushed in the middle by aggressive pricing from companies such as OPPO, Vivo and Xiaomi,” notes Mengmeng Zhang, principal analyst at Counterpoint.
“While the iPhone 15 is a great device, it doesn’t have significant improvements over the previous version, so consumers feel comfortable sticking with older generation iPhones for now.
Some experts attribute Apple’s sales collapse to the political machinations of the Chinese Communist Party (CCP).
“The CCP is disrupting the market, that’s obvious,” says Xie Tian, a professor at the University of South Carolina’s Aiken School of Business. Epoch Times. He emphasizes that the Chinese regime is ready to support Huawei in all possible ways.
“More than a civilian mobile phone company, Huawei is supported by all communications infrastructure related to national defense. Furthermore, the CCP wants to use civilian products to support the exploration and deployment of its military technologies and communications equipment: this is its political motivation,” he claims.
The Chinese regime has banned civil servants from using foreign-branded phones in the workplace, including Apple iPhones, for security reasons.
However, Xie Tian rejects the Chinese regime’s excuse for Apple’s security concerns, noting that the American technology company complied with the CCP’s request and agreed to set up a data center in Guizhou, southwest China, to keep data inside the country.
“Therefore, there is no security risk that Apple technology would allow Chinese consumer data to be leaked, unlike the CCP’s collection of Western consumer data through TikTok,” it concludes. “The purpose of removing Apple is to help Huawei. »
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