iPhone 16 Sales Soar 20 Percent in China Debut as Demand Returns

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Sales of Apple’s newest iPhones in China are up 20 percent in their first three weeks compared with 2023’s model, a positive sign for a device that struggled this year to gain traction in the world’s largest smartphone market.

The iPhone 16 debuted in September and has outperformed its predecessor so far, according to Counterpoint Research data provided to Bloomberg News. Consumers continue to shift to the pricier models, and sales of the top-end Pro and Pro Max models gained 44 percent compared with last year’s equivalents.

While just a three-week snapshot, the data suggests Apple’s 2024 launch is faring better than last year’s. Production issues hampered the iPhone 15 family early on, which may have constrained initial sales, Counterpoint analyst Ivan Lam said. Apple’s marquee device also faced a stiff challenge from Huawei Technologies’ Mate 60 series, which won over local consumers with a made-in-China processor. That device continues to sell well, according to Lam.

“Given the smooth production ramp-up, consistent pricing strategy, and the initial wave of upgrades by existing iPhone users, the iPhone 16 series has experienced substantial growth in the Chinese domestic market,” Lam said. “The product mix has also improved markedly.”

Apple shares rose to a record this week, fueled by optimism around the rollout of the Artificial-Intelligence (AI)-powered iPhones. Analysts had warned that the iPhone 16 might fare poorly in China, given the absence of a local partner to power AI features. Beijing has barred foreign-developed AI models, meaning Apple may have to secure a local partner such as Baidu Inc.

Though off to a good start, the iPhone 16 faces a number of big local rivals this year. Vivo just announced its new X200 Pro flagship, Huawei is expected to introduce its next-generation Mate device in November and Xiaomi and Oppo are set to update their lineups before year’s end. China remains the world’s largest — and by Apple Chief Executive Officer Tim Cook’s estimation, most competitive — smartphone market in the world.

For Apple, the iPhone remains by far its most important product, as it directly contributes roughly half of all sales and draws consumers in to buy accessories like the Apple Watch or subscription services like Apple Music. But the smartphone market has been stagnant for years, and it remains to be seen how well the latest generation will fare over the full course of its time on sale.

The iPhone 16 is debuting after a rocky 2023, when the world’s number two economy struggled to escape a post-Covid funk. That downturn worsened in 2024 alongside a property crisis. Some Chinese consumers may now hold off on large purchases until November’s Singles’ Day discounts from retailers like Alibaba Group Holding and JD.com kick in, Lam said.

© 2024 Bloomberg L.P.

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