What does the decline in Apple phone sales indicate?

According to the latest report released by International Data Corporation (IDC), in the first quarter of 2024, under the strong impact of Chinese rivals Xiaomi and Transsion Holdings, Apple's global smartphone shipments suffered a heavy blow, with a year-on-year sharp drop of nearly 10%, losing its top spot in smartphone shipments. Samsung regained its dominant position in the global smartphone market, and its market share rebounded to over 20%.

According to the report, Apple's shipment volume in the first quarter was 50.1 million units, a decrease of 9.6% from 55.4 million units in the same period last year. Among the top five smartphone brands in the report, Apple had the largest year-on-year decline. Its market share has also dropped from 20.7% a year ago to 17.3%, and its global ranking has slipped from first to second.

After missing out on the top spot in the fourth quarter of last year, Samsung regained the top spot in the first quarter of this year, with a market share rebounding to 20.8% and shipments remaining largely unchanged from last year, reaching 60.1 million units. In the first quarter, Xiaomi's shipment volume in China surged by 33.8% to 40.8 million units, while Transsion Holdings surged by 84.9% to 28.5 million units. Based on shipment volume, Xiaomi (14.1%), Transsion Holdings (9.9%), and OPPO (8.7%) ranked third, fourth, and fifth globally in market share in the first quarter, respectively. Transsion Holdings has the strongest momentum among all mobile phone manufacturers and has quietly become the largest smartphone manufacturer in Africa and the fifth largest in the world. Transsion is entering the Southeast Asian market and attempting to enter the high-end market by launching foldable screen smartphones. Compared to Xiaomi and Transsion Holdings, OPPO performed relatively poorly, with shipments dropping 8.5% in the first quarter to 25.2 million units.

The Vice President of IDC Global Mobile and Consumer Device Tracker stated that although IDC expects these two companies to continue to dominate the high-end mobile phone market, the strong growth of China's Xiaomi, Transsion, OPPO, OnePlus, and Vivo may prompt these two original equipment manufacturers to seek expansion and diversification areas.

The report also shows that the total global smartphone shipments in the first quarter of 2024 increased by 7.8% year-on-year, reaching 289.4 million units. IDC stated that despite facing macroeconomic challenges, this is the third consecutive quarter of shipment growth, "a powerful indicator of the ongoing recovery.". But in the wave of overall recovery in the global smartphone industry, Apple has missed a good opportunity. Since the beginning of this year, most tech giants have seen their stock prices soar, while Apple's stock price has fallen by about 7% against the trend. Apple's iPhone sales in its largest overseas market, China, have plummeted.

According to reports, the shipment volume of iPhones in China in January was 5.5 million units, a decrease of 39% year-on-year. In February of this year, the shipment volume of iPhones in China was 2.4 million units, a sharp drop of 33% year-on-year, continuing the trend of declining shipment volume since the beginning of this year. What does the sharp drop in Apple sales indicate?

One reason is that Apple's current technological innovation speed lags behind other manufacturers, and its innovation ability is not as good as before. Other manufacturers have no less product innovation ability than Apple, and even launched many new features that Apple does not have. As a result, the high price makes it face some difficulties in fierce market competition.

The second is that consumer demand is undergoing changes. With the continuous improvement of smartphone quality, consumers' demand for phone updates has decreased, and their desire to purchase high-end brands is not high, which has had a certain impact on Apple's sales.

Thirdly, the smartphone market is approaching saturation, and Apple's marketing strategy also has problems. The global smartphone market is approaching saturation, and a decline in sales is an inevitable trend; Apple's investment in marketing has decreased, making it unable to cope with the rich promotional activities of other manufacturers.

With the continuous progress of technology and the increasing maturity of the market, consumers' demand for smartphones has shifted from simple hardware configuration and performance improvement to more emphasis on user experience, innovative features, and personalized design. With the continuous development of technologies such as 5G and AI, Apple's market share will continue to be eroded and even face the risk of marginalization.