According to a new report from Credit Suisse Analysts, China's attraction to the iPhone is no longer that strong compared to when the device first hit Chinese stores a decade ago.
iPhone deliveries in China dropped 35.5 percent in November compared to the same time last year, analysts wrote in a note Thursday, despite a moderate rise in the Chinese smartphone market during the same period.
The analysts said October's Chinese iPhone sales were down 10.4 percent (year-over-year), making this the second straight month of double-digit percentage retreat.
The Cold Shoulder
Since the release of the iPhone 11 Series, overall deliveries in China has dropped by 7.5 percent compared to last year, analysts said, adding that "we believe China's iPhone revenue has fallen by 17.4 percent over the past three months"
Apple's stock was slightly down Thursday as well. The analysts cited the approaching deadline of Dec. 15, which could see more tariffs being levied on Apple products as part of the ongoing China-US trade showdown as a cause for concern.
"Our base case continues to factor in a favorable outcome; nevertheless, we anticipate that Apple will find it difficult to force through tariff-related price increases for U.S. customers," analysts said.
Market experts have given Apple stocks the same 'Neutral' rating, setting a $221 per share price target in October. They estimated that U.S. iPhone prices could see an increase by about $70 per unit due to the 15 percent tariff.
Optimistic Still
Recently, Apple has had a difficult time in China. According to market research firm Canalys, its shipments declined 14 percent year-over-year in the second quarter of 2019, while its market the share fell to 5.8 percent from 6.4 percent in the same quarter last year.
Nonetheless, Apple analysts were optimistic about the performance of China's latest iPhone lineup when it was rolled out. Some of the new iPhone models had two to three weeks of waiting time in September in China. Delivery times for devices may provide a consumer demand indicator.
Leading Apple analyst Ming-Chi Kuo said he expected Chinese demand to beat expectations for the new iPhones in September.
Chinese consumers had to pay a marked-up price, between 10.4 percent and 12.4 percent higher for the iPhone 11, and 18.5 percent to 23 percent higher for the iPhone 11 Pro and Pro Max relative to U.S. prices when the new series was released in September.
Apple is not making an iPhone that can connect to 5G networks, the next-generation cellular networks that offer high-speed data with the ability to support technology such as self-driving cars.
