Apple’s market share slides in China, iPhone shipments decline: Kuo

Apple is losing market share in China due to declining iPhone shipments, supply chain analyst Ming-Chi Kuo wrote in a report on Friday. The stock fell 2.4%.

“Apple adopted a cautious stance when discussing iPhone 2025 production plans with key suppliers,” Kuo, an analyst at TF Securities, wrote in the place. He added that despite the expected launch of the new iPhone SE 4, shipments are expected to drop 6% year-on-year for the first half of 2025.

Kuo expects Apple’s market share to continue to decline, as two of the upcoming iPhones are so thin that they will likely only support eSIM, which the Chinese market does not currently promote.

“These two models could face shipping momentum challenges unless their design is modified,” he wrote.

Kuo wrote that in December, overall smartphone shipments in China were flat from a year earlier, but iPhone shipments fell 10% to 12%.

There is also “no evidence” that Apple Intelligence, the company of the device artificial intelligence The offer is driven by hardware upgrades or service revenue, according to Kuo. He wrote that the feature “did not spur demand for iPhone replacements,” according to a supply chain survey he conducted, and added that, in his view, the feature’s appeal ” has declined significantly compared to cloud-based AI services, which have advanced rapidly in subsequent months.”

Apple’s estimated iPhone shipments are about 220 million units for 2024 and between about 220 million and 225 million for this year, Kuo wrote. This is “below the market consensus of 240 million or more,” he wrote.

Apple did not immediately respond to CNBC’s request for comment.

WATCH: Apple has to do something to justify its runup