(Bloomberg) — Sales of Apple Inc.’s latest iPhone in China were up 20% in the first three weeks compared with the 2023 model, which struggled to gain momentum this year in the world’s largest smartphone market. That’s a positive sign for this device.
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The iPhone 16 debuted in September and has outperformed its predecessor so far, according to data from Counterpoint Research provided to Bloomberg News. Consumers continue to migrate to more expensive models, with sales of the top-of-the-line Pro and Pro Max models up 44% compared to comparable models last year.
Although it’s just a three-week snapshot, the data suggests Apple’s 2024 launches are going better than last year. Counterpoint analyst Ivan Lam said production issues hampered early sales of the iPhone 15 family, which may have suppressed initial sales. Apple’s flagship devices also faced a tough challenge from Huawei’s Mate 60 series, which appealed to domestic consumers with its Chinese-made processors. Lam said the device continues to sell well.
“Given the smooth production ramp-up, consistent pricing strategy, and first wave of upgrades by existing iPhone users, the iPhone 16 series has achieved significant growth in China’s domestic market,” Lam said. “The product mix has also improved significantly.”
Apple shares rose to record highs this week, boosted by optimism over the launch of the artificial intelligence-powered iPhone. Analysts had warned that the iPhone 16 might not do well in China given the lack of a local partner to power AI capabilities. Apple may have to secure local partners such as Baidu, as the Chinese government bans AI models developed abroad.
Despite a strong start, the iPhone 16 will face off against a number of strong local competitors this year. Vivo just announced its new X200 Pro flagship, Huawei is expected to unveil its next-generation Mate devices in November, and Xiaomi Corp and Oppo are expected to update their lineups by the end of the year. China remains the world’s largest smartphone market and, in the estimation of Apple CEO Tim Cook, the world’s most competitive smartphone market.
The iPhone remains Apple’s most important product, directly accounting for about half of all sales and driving consumers to buy accessories like the Apple Watch and subscription services like Apple Music. However, the smartphone market has been stagnant for years, and it remains to be seen how well the latest generation will do over its launch period.
The iPhone 16 arrives after a tumultuous 2023, when the world’s second-largest economy struggled to emerge from post-COVID-19 turmoil. This economic downturn worsened in 2024 with the real estate crisis. Some Chinese consumers may hold off on big-ticket purchases until retailers such as Alibaba Group Holding and Jingdong Shopping begin offering Singles’ Day discounts in November, Lam said. .
(Updates last paragraph with comment about Singles’ Day discount)
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