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iPhone 15 Saw Sluggish Sales amid Tim Cook’s Swift China Tour

October 20, 2023
in Technology
iPhone 15 Saw Sluggish Sales amid Tim Cook’s Swift China Tour
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Tim Cook has been in China for three days.

On October 16th, he appeared at an Apple store in Chengdu, and shared photos of Chengdu Anshun Bridge taken with an iPhone 15 Pro Max on social media. On the 17th, he visited Yucheng District Fourth Primary School in Ya’an, Sichuan, where he experienced using iPads with students and programmed drones using iPads. On October 18th, Cook was seen at a factory of Luxshare – its major supplier in China – in Zhejiang Province.

China is now the largest market for Apple’s iPhone, and it is also a manufacturing center for Apple.

However, in recent years, Apple has intentionally adjusted its supply chain and deployed the production of iPhones and other products to countries like India.

In March of this year, Cook stated at the China Development Forum that “Apple relies on China. For Apple, China is both a manufacturing center and a rapidly growing consumer market. Apple and China . . . grew together and so this has been a symbiotic kind of relationship.”

However, the market’s response to Apple’s newly released iPhone 15 series has been lukewarm. Research firm Counterpoint Research reported this week that sales of the iPhone 15 series in China decreased by 4.5% during the first 17 days after its launch, compared to the iPhone 14 series.

The impact of Tim Cook’s visit to China on boosting iPhone sales is yet to be observed.

Additionally, China is an important production center for Apple, with approximately 90% of iPhones being manufactured in China. Cook has strict control over the supply chain and has made multiple visits to Chinese supply chain factories. According to Apple’s previously announced supply chain list for the fiscal year 2022, the number of suppliers in China is the highest, far exceeding Japan and the United States. Apple’s global supply chain employs around 1.5 million employees, with a majority located in China.

Nonetheless, outside of China, Apple is gradually shifting parts of its supply chain to other locations. Since 2017, Apple has been manufacturing iPhones in India, although usually older models. However, starting last year, Apple began assembling the flagship iPhone 14 model in India as well. According to Counterpoint data, as of 2022, China accounts for approximately 96% of Apple’s smartphone production and assembly market share, while India holds about 4%. In the fiscal year ending in March this year, Apple’s iPhone production in India doubled and exceeded $7 billion.

A report from Morgan Stanley predicts that the Indian market may account for 15% of Apple’s revenue growth in the next five years. Currently, Apple’s estimated annual sales in the Indian market are $6 billion, and it is projected to reach $40 billion in revenue growth over the next decade.

A recent report by TechInsights also states that India is an important strategic market for Apple in terms of sales and manufacturing, ranking as its fifth-largest market in the second quarter of this year. According to insiders familiar with India’s supply chain from domestic smartphone manufacturers, India supports Apple’s local production and provides certain privileges such as issuing visas to Apple employees compared to other manufacturers.

Luxshare’s stock price was not affected by Cook’s visit to the factory.

As Apple seeks partial supply chain relocation, its suppliers and manufacturers, including Luxshare, are also looking for new business opportunities.

Luxshare not only produces iPhone, Apple Watch, AirPods and Apple Vision Pro but has also entered the Japanese automotive electronics industry through acquisitions. It has been involved in the automotive industry for over 10 years and acquired BCS department under ZF Friedrichshafen AG in 2018. This year, Luxshare has cooperated with Chery Automobile and collaborated with GAC Group to invest in the research and production of intelligent driving control systems.

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Copyright for syndicated content belongs to the linked Source : Pandaily – https://pandaily.com/iphone-15-sales-lag-behind-iphone-14-and-tim-cooks-swift-china-tour/

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