Apple will be more aggressive in defending market share as Huawei makes progress - Jefferies
Apple (NASDAQ:AAPL) will likely take a more aggressive approach to defend its market share in China as the tech giant’s recent challenges in that market and rising competition, most notably from Huawei (HW), put its leading position at risk.
The US sanctions imposed on Huawei have mainly benefited Apple, boosting the iPhone’s share of both the global and Chinese smartphone markets by 5 and 8 percentage points, respectively between 2019 and 2022.
However, the introduction of Huawei's Mate 60 series in the third quarter of 2023 had a noticeable impact on iPhone sales momentum in China, analysts at Jefferies pointed out in a Monday note.
During its December quarter earnings announcement, Apple indicated a double-digit percentage decline in iPhone revenue in Greater China year-over-year.
“If HW could enhance supply capability in the coming years, and offer more attractive features, it could present a serious challenge to iPhone in China,” analysts said.
In Q4 2023, the tech behemoth applied significant discounts to the iPhone 14 and 14+ models in China to defend its market share.
Along these lines, Jefferies believes that Apple will continue to employ aggressive pricing strategies for previous-generation models in China to defend its position in the market.
“Furthermore, we expect Apple to become increasingly aggressive in introducing new features in future iPhone models to sustain/widen its lead over HW and other OEM brands. This would become a bigger challenge to HW,” analysts wrote.
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