Global iPhone shipments are down nearly 10% as Apple's 2024 woes continue

Global shipments of Apple's ( AAPL ) iPhone fell nearly 10% in the first quarter, despite a broader smartphone market recovery, as the company continues to grapple with growing challenges from China such as Xiaomi.

According to market intelligence firm ITC, Apple's Q1 shipments fell 9.6% year over year from 55.4 million units in the first quarter of 2023 to 50.1 million units in Q1 this year. The company's overall global market share fell from 20.7% to 17.3%.

Apple shares were down less than 1% on Monday morning.

Apple wasn't the only company facing headwinds during the quarter. Samsung, the world's largest smartphone maker, saw shipments fall by just 0.7%.

“The smartphone market has emerged from the turmoil of the past two years as a strong and transformative market,” Nabila Bhopal, director of research at ITC, said in a statement.

“First, we continue to see growth in value and average selling price (ASP) as consumers choose higher-priced devices. Market players continue to adjust their strategies in a post-recovery world.”

Chinese companies like Xiaomi and Transition are gaining momentum in the market. Xiaomi shipments rose 33.8% to 40.8 million units in the quarter, while exchange shipments rose 84.9% to 28.5 million units.

Apple's China business has been a thorn in the company's side for the past two quarters. iPhone revenue fell 13% in the first quarter of the year and is expected to decline again when the company reports its Q2 earnings on May 2.

China is Apple's third largest market behind the US and Europe, making the region particularly important to the company's success.

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iPhone 15 Pro phones are shown during the announcement of new products at Apple's campus in Cupertino, Calif., Tuesday, Sept. 12, 2023.  (AP Photo/Jeff Chiu)

iPhone 15 Pro phones are shown during the announcement of new products at Apple's campus in Cupertino, Calif., Tuesday, Sept. 12, 2023. (AP Photo/Jeff Chiu) (Associated Press)

Geopolitical tensions between the US and China are also adding to Apple's woes. According to BloombergChinese officials are increasingly telling workers not to use iPhones or other foreign-made phones in the office.

Apple is trying to ditch China as its main manufacturing hub. The company is increasingly looking to Vietnam and India to source a large portion of its manufacturing capabilities. CEO Tim Cook posted a series of photos of himself on Twitter for X on Monday in Vietnam.

Apple has been facing a series of challenges, from declining sales of its iPad and wearables to a Department of Justice antitrust lawsuit alleging Apple is intentionally acting to harm competition in the smartphone industry. The EU's European Commission hit the company with a $2 billion fine related to antitrust concerns about streaming music. The tech giant is also facing a $1 billion lawsuit in the UK over fees it charges developers who sell apps through the App Store.

Apple shares have fallen so far this year, with shares down more than 8% since January. The company's shares are up just 6% over the past 12 months, while the S&P 500 is up 20%.

But things will start to turn around for the company later in the year. Apple is widely expected to announce some form of generative AI-based capabilities during the WWDC developer conference in June. If Apple implements technology in new and interesting ways, it will boost iPhone, iPad and Mac sales.

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However, it's unclear what Apple has to offer when it comes to buildable AI, and there's no guarantee it will be a huge hit. Google (GOOG, GOOGL) and Samsung have already started introducing the technology in their smartphones, but it's mostly designed for photo manipulation and quick translation.

Email Daniel Hawley at [email protected]. Follow him on Twitter @Daniel Hawley.

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