Apple (AAPL) faced a challenging final quarter last year, with global iPhone sales dropping by 5% in the calendar fourth quarter and its global market share slipping to 18% in 2024, according to a Bloomberg report citing Counterpoint Research. This decline was made worse by the absence of Apple Intelligence in China, which is the tech giant’s largest market outside the U.S.
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AAPL’s Decline Boosts Competitors’ Share
The decline in AAPL’s market share has allowed Chinese rivals to gain ground. In fact, despite a 4% growth in the global smartphone market, Apple’s smartphone sales declined by 2% in 2024, as competitors like Xiaomi (XIACF) and Vivo captured a larger share of the market. Xiaomi and Vivo are increasingly capturing the expanding Android segment of smartphones. Android is Google’s (GOOGL) mobile operating system.
AAPL’s Market Share Drops Due to Lack of AI
A major reason for AAPL’s declining market share in China is that its iPhone 16 lacks AI features in the country. The Cupertino-based tech giant is playing catch-up in artificial intelligence. While its AI features began rolling out with the iPhone 16 launch in September, they are unavailable in China due to ongoing efforts to establish local partnerships. This delay dampened the iPhone 16
In fact, Counterpoint director Tarun Pathak noted, “Apple’s iPhone 16 series was met with a mixed response, partly due to a lack of availability of Apple Intelligence at launch.” However, Pathak stated that “Apple continued to grow strongly in its non-core markets like Latin America.”
Interestingly, a greater share of Apple’s sales came from its premium Pro and Pro Max models in China, which together accounted for more than 50% of its sales.
Chinese Companies Pose Stiff Competition to AAPL
Meanwhile, Chinese smartphone makers continued to surge ahead, with Huawei and Honor ranking among the fastest-growing brands globally. These companies are heavily investing in developing in-house AI tools capable of performing various tasks for users, further intensifying competition.
Is Apple Stock a Buy, Sell, or Hold?
Analysts remain cautiously optimistic about AAPL stock, with a Moderate Buy consensus rating based on 19 Buys, seven Holds, and three Sells. Over the past year, AAPL has increased by more than 20%, and the average AAPL price target of $244.77 implies an upside potential of 3.3% from current levels.
