The market tracker found sales of the iPhone 16e were 60% stronger in its opening three days versus the iPhone SE from 2022. But that won’t be enough to alter the forecast that Apple’s sales in China will decline about 2% overall this year. “The competition from Android will be even stronger, strengthened by the national China subsidies which will benefit Android significantly more than Apple,” said Nabila Popal, IDC senior director.
The new $599 iPhone 16e replaces the $429 iPhone SE, making the challenge in China tougher when it comes to fending off budget Android alternatives. The device includes only one rear camera, limited base storage and insufficient AI features, making it a tougher sell in the region.
The Chinese government has set aside 300 billion yuan (in excess of $41 billion) for subsidies to stimulate the consumer economy. Those extended to smartphones in recent months and have helped the likes of Xiaomi Corp. and Vivo expand their sales. Apple is working on bringing its Apple Intelligence suite to Chinese consumers as early as the middle of this year, Bloomberg News has reported.
Still,Apple could make up for the sales weakness via other models in the region. “We need to keep in mind that these would likely still be only a small portion of Apple’s volumes given that many consumers in China place an emphasis on ‘face’ — not wanting to be seen as having a lower-priced iPhone,” IDC’s Bryan Ma said. Looking beyond China, he expects the 16e to make up as much as a fifth of iPhone sales in India in the second half of the year.
Apple reported that sales in China fell about 11% over the holidays, with the iPhone likely contributing to much of the shortfall. The company estimates that overall revenue will grow marginally in the current period.
