According to TechInsights, Apple’s iPhone sales in China exceeded those in the United States for the first time in the second quarter of 2023. This milestone made China the largest single market for iPhone shipments. The photo below shows iPhones displayed at an Apple store in Hangzhou, East China’s Zhejiang province.
Counterpoint Research released a report stating that global smartphone shipments are expected to reach a ten-year low this year, mainly due to the decline in the U.S. and China markets.
However, despite the overall market decline, Apple is poised to become the leading smartphone player in terms of shipments. This is primarily because of the strong sales performance of their high-end iPhones.
It’s important to note that shipments don’t equate to sales and only represent the number of devices sent to retailers by smartphone vendors.
Counterpoint Research predicts a 6% year-on-year decline in smartphone shipments in 2023, totaling 1.15 billion devices.
“Asia, particularly China, is a major obstacle to positive growth as the region experiences declining demand across emerging markets,” Counterpoint stated in its report.
The Chinese economy has struggled to recover as expected this year, with consumers remaining cautious about spending.
Karn Chauhan, a senior analyst at Counterpoint Research, attributed the decline in global smartphone sales to the significant reduction in annual Chinese smartphone purchases, which went from an average of 450 million devices to 270 million per year.
Counterpoint’s report also highlighted the disappointing performance of North America, forecasting double-digit declines for the region in 2023 due to consumer hesitation in upgrading their devices.
“Despite favorable job market conditions and falling inflation, consumers are reluctant to replace their smartphones, leading to record-high replacement rates in the U.S. and globally,” the research firm mentioned.
‘Apple in a good spot’
Despite the decline in overall smartphone shipments, the premium segment of the market, characterized by higher-priced devices, remains resilient.
Apple is gearing up to launch its latest flagship smartphone, the iPhone 15, in September. This release is expected to boost Apple’s market position and attract high-value customers, taking advantage of the large installed base of iPhone 12 users.
“We are closely monitoring the fourth quarter, as the iPhone 15 launch presents an opportunity for carriers to attract valuable customers. With attractive promotions, Apple is well-positioned,” commented Jeff Fieldhack, research director for North America at Counterpoint Research.
Counterpoint Research expects Apple’s shipments to increase slightly year-on-year, driven by demand from markets like China and other Asian countries where there is a growing trend of premiumization, with consumers willing to pay higher prices for smartphones.
Apple’s presence in the premium segment is supported by its iPhone range.
The research firm also noted that Apple has a chance to claim the top spot globally in terms of annual shipments for the first time, as Samsung currently holds that position.
“Apple is very close to becoming the leader. The difference in sales is minimal. Assuming no production issues like last year, it’s too close to call,” added Fieldhack.
Furthermore, Apple’s recent expansion into new markets, particularly India, is expected to contribute to its growth and market position. The company opened physical stores in India and has seen strong demand from local consumers for premium devices.
Karn Chauhan believes that the success of the iPhone 15 and Apple’s performance in non-core iPhone markets will determine if Apple surpasses Samsung as the top smartphone maker this year.
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