Apple’s recent holiday-quarter sales have faced challenges due to delays in rolling out artificial intelligence (AI) features and intensified competition from Chinese smartphone manufacturers. The company’s global iPhone sales declined by approximately 5% in the final quarter of 2024, with its market share dropping to 18%. In contrast, the overall smartphone market experienced a 4% growth during the same period.
A significant factor contributing to this decline is the delayed introduction of Apple’s AI suite, known as “Apple Intelligence,” in China. While these features have been available in other regions, they are still pending approval in China, allowing local competitors to capture market share with their own AI-integrated devices.
Despite these challenges, Apple’s premium models, such as the Pro and Pro Max, have seen increased demand in China, accounting for more than half of the company’s shipments in the country. This trend indicates a strong consumer preference for high-end products, even amidst rising competition from local brands.
Analysts have expressed concerns about Apple’s ability to convince users to upgrade to newer models, citing a lack of compelling hardware differentiation and limited practical applications for new AI features. Additionally, uncertainty in the Chinese market, due to economic slowdown and local competitors, further compounds the issue.
In response to these challenges, Apple has implemented price cuts on iPhones and MacBook computers in China, offering discounts of up to 500 yuan (approximately $68.50) to remain competitive. The company also plans to collaborate with Chinese internet services firms to introduce AI features tailored to the local market.
Looking ahead, Apple’s 2025 outlook suggests a focus on incremental updates and AI integration across its product lineup. Potential new smart home products, like a smart home hub and security camera, could offer positive developments. However, analysts remain cautious due to market share losses in China, AI adoption issues, and unfavorable currency conditions.
