Research firm Counterpoint reports that Apple's latest iPhone 16 has seen a strong sales start in the Chinese market, with sales increasing by 20% compared to the iPhone 15 from 2023. The Pro and Pro Max models have been particularly successful, with a 44% rise in total sales compared to similar models from the previous year.
Analysts attribute this growth to smooth production and effective pricing strategies, unlike last year's iPhone 15, which faced initial sales limitations due to production issues. Despite concerns about the unavailability of Apple's AI functions in mainland China, the iPhone 16's demand has surpassed expectations, potentially marking a "historic" upgrade cycle.
Wedbush Securities analyst Dan Ives emphasizes the strong early sales of the iPhone 16 as an indicator of a significant market recovery in China, which could drive Apple's "growth revival." Ives connects this expansion to an AI-driven supercycle led by the iPhone 16, maintaining an "outperform" rating for Apple with a $300 price target. He also highlights the potential of Apple's AI collaboration with Baidu to boost iPhone sales.
Looking forward, Ives predicts that the AI-driven upgrade cycle may lead to over 240 million iPhone sales in Apple's 2025 fiscal year, with an estimated 100 million iPhones due for upgrades by then.
However, Apple continues to face fierce competition from domestic brands like Huawei, Vivo, and Xiaomi. Counterpoint data indicates a 2% decline in overall iPhone sales in China over the past three weeks, attributed to a downturn in older model sales and intensified competition with Huawei's Mate and Pura series. Huawei's latest smartphone release coincides with Apple's, highlighting the increasingly competitive nature of the world's largest smartphone market, where domestic rivals are continuously gaining market share.
