China iPhone sales strong, Apple tells investors as Huawei threat looms

Research firm Canalys estimated that overall smartphone sales in China fell 3% in July-September from a year earlier as consumers bought fewer smartphones as an economic recovery was choppy.

Apple said on Thursday that demand for its iPhones in China was strong, trying to reassure investors who are worried it is losing ground to a newly resurgent Huawei Technologies and other local smartphone makers.

"In mainland China, we set a quarterly record for the September quarter for iPhone," Chief Executive Tim Cook told Reuters in an interview. "We had four out of the top five best-selling smartphones in urban China."

Apple appeared to have gained market share in China in the July-September period, even if the overall smartphone market may have contracted, he said on a conference call with analysts.

The company expects to sell more iPhones in the holiday quarter despite this year's quarter having one fewer week of sales than the prior year's, Cook said.

Research firm Canalys estimated that overall smartphone sales in China fell 3 per cent in July-September from a year earlier as consumers bought fewer smartphones as an economic recovery was choppy.

That was slower pace of decline than previous quarters, a sign that a slump in the market had eased. Sales of iPhones in China fell 6 per cent, Canalys said.

On the other hand, analysts estimate that Huawei's China smartphone sales grew strongly in the quarter. Its Mate 60 Pro phone has grabbed headlines for using an advanced China-made chip despite being squeezed for years by debilitating US sanctions.

Apple said on Thursday that its overall sales in China dipped 2.5 per cent but it blamed tough Mac computer and iPad sales for that. Cook said sales there grew after accounting for foreign-exchange rates.

Apple's sales in China have fallen in three of the four quarters in its 2023 fiscal year, which ended Sept. 30.

Apple's comments followed optimistic commentary from its chip supplier Qualcomm on Wednesday, which signaled that a two-year-long slump in the smartphone market was easing, led by a recovery in China.

Qorvo, another wireless connectivity chip supplier to Apple, also said inventory levels at their China customers were slowly falling and that the company had recorded its largest bookings quarter in more than two years.

Both chipmakers posted upbeat forecasts, with Qualcomm predicting a 35 per cent quarter-on-quarter rise in sales to Chinese smartphone customers.

Qualcomm is also facing new competition from Huawei's chips but said on Wednesday it does not expect Huawei's re-entry into the market to affect its relationship with Chinese smartphone companies.