Demand for Apple Inc (NASDAQ:AAPL)'s iPhone 15 is already dropping off in China, signaling a potential decrease in consumer interest in the most recent version of the iPhone 15.
Analysts at Jefferies noted that resale prices of the iPhone 15 Pro Max (15PM) have dropped up to 17% in Hong Kong.
One version, the 256GB model in Titanium color, is an exception to this trend, still maintaining a slight premium, but resale values for other versions are significantly reduced, Jefferies noted, effectively putting them at a discounted price point.
The downturn in the resale market might be attributed to a widespread concern regarding overheating issues associated with the iPhone 15.
“Our conversations with dealers indicate it could be due to the widely discussed issue of overheating, mainly in China,” Jefferies wrote. “At least in China, these are signs of weak demand.”
Moreover, orders are now taking four days longer to be fulfilled compared to previous delivery timelines, analysts noted.
Meanwhile, Huawei poses another sales threat to Apple amongst Chinese consumers.
Huawei's chip production capacity on the 7nm scale is projected to expand significantly from 2023 to 2026. Initially estimated at 6 million to 72 million chips annually, this forecast is based on the number of cutting-edge immersion DUV machines that China can acquire in the coming years. The latest technology advancements, specifically China's access to ArFi DUV machines from ASML, have influenced these revised predictions, allowing for higher capacity expectations. However, this still falls slightly below the projections by Huawei's internal smartphone experts.
Huawei might sell between five and six million phones in 2023, but if they sell more in the following years (like 72 million by 2026), they could start taking some customers away from iPhones.
Jefferies analysts estimate about 29% of Huawei's future sales could be people who might have bought iPhones instead.
Between 2021 and mid-2023, Huawei sold about 136 million fewer phones, likely due to US sanctions, compared to 39 million iPhones sold.
If Huawei starts selling 72 million phones by 2026, they might affect about 20.8 million iPhone sales in one of the world’s largest smartphone markets, according to analysts.