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Apple Faces Tough Road Ahead with Declining iPhone Shipments in 2024 Apple Faces Tough Road Ahead with Declining iPhone Shipments in 2024

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One of the best-known companies in the world has taken a dip. Apple’s (NASDAQ:AAPL) iPhone shipments in 2024 are likely to decline significantly by about 15%, according to a recent analysis by TF International Securities’ analyst Ming-Chi Kuo. This prediction is rooted in structural challenges, ensuring the road ahead for the tech giant is fraught with difficulty. A stark cut of 15% indicates a steep cliff Apple is now headed toward.

The Numbers

Data released on Tuesday showed a 2% drop in Apple’s stock following this revelation by Ming-Chi Kuo. The analyst’s findings from the latest supply chain survey paint a grim picture. Apple curbing its 2024 iPhone shipments of crucial upstream semiconductor components to approximately 200 million units, marks a significant downturn.

Structural Woes

Ming-Chi Kuo’s analysis points to structural challenges as the main driver behind the impending decline in shipments. These challenges include the emergence of a new high-end mobile phone design paradigm and a continuous decline in shipments in the Chinese market.

The new high-end mobile phone design paradigm, featuring generative AI and foldable phones, poses a formidable threat to Apple’s market share. Ming-Chi Kuo notes that the main reasons for this shift are the resurgent presence of Huawei and the growing preference for foldable phones among high-end users in the Chinese market, making it clear that Apple faces tough competition and shifting consumer preferences in the region.

Rising Competition

Meanwhile, the analyst has highlighted that Samsung (OTCPK:SSNLF) has revised its shipments of the Galaxy S24 series in 2024 upwards by 5% to 10%, benefiting from better-than-expected demand due to high integration of GenAI functions. In contrast, Apple has tempered the shipment forecast of iPhone 15 in the first half of this year, further complicating Apple’s standing in the mobile phone space.

Impact in China

Apple’s weekly shipments in China are facing a considerable decline. Ming-Chi Kuo’s analysis suggests that the company’s shipments in China have plummeted by 30% to 40% year-over-year in recent weeks, a staggering indication of the company’s waning influence in one of the largest global markets.

Forecast and Challenges

The tough road ahead for Apple is further underscored by the analyst’s forecast that the company is unlikely to introduce new iPhone models with significant design changes and a more comprehensive GenAI ecosystem/applications until 2025 at the earliest. This could severely dent iPhone shipment momentum and ecosystem growth, as Ming-Chi Kuo predicts. Ultimately, the coming year looks to be an uphill climb for Apple.

Historical Perspective

Apple has been competing fiercely with Chinese rivals in the smartphone market, namely Huawei Technologies and Xiaomi (OTCPK:XIACF) (OTCPK:XIACY). Huawei’s shipments soared by 36.2% in the fourth quarter of the year, painting a gloomy picture for Apple’s standing in the Chinese market, juxtaposed with the ascension of its competitors.

Market Response

The market has indicated its reaction to these revelations. Last week, research firm IDC reported a 2.1% decline in fourth-quarter iPhone shipments in China, revealing significant pressure on Apple. Though Apple clinched the largest phone seller title in China for the entire year of 2023, the company’s sales are expected to come under strain in 2024.

Analysts’ Projections

Another analyst at Jefferies has projected a 30% drop in Apple’s Chinese iPhone sales in the first week of 2024, compared to the same period a year ago. The firm expects a double-digit decline in iPhone volume in China for the whole year, painting a dire picture for the company in the world’s largest smartphone market.

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