According to research firm IDC, Apple (AAPL) surpassed Samsung Electronics to become the world’s largest seller of smartphones last year.  Apple’s iPhone accounted for 20% of the global market in 2023, with nearly 235 million shipments.  Samsung Electronics, whose smartphone shipments last year fell more than -10% to 226.6 million, came in second and lost the top spot in smartphone sales for the first time since 2010. 

Apple’s dominance in the smartphone market suggests it is weathering an industrywide slump better than its rivals.  Apple managed to maintain iPhone sales momentum despite a lukewarm reception late in 2023 for its new iPhone 15 in China, its biggest international market. Apple iPhone sales in China were hurt by a widening government crackdown on the use of foreign electronic devices in the country, which boosted the smartphone sales of China’s Huawei Technologies and Xiaomi Corp.

A boost in iPhone sales worldwide in 2023 was driven by aggressive offers from Apple that enticed buyers toward its premium devices.  Apple registered +3.7% growth in 2023 in smartphone sales, the only player of the top three global smartphone makers to register growth last year.  According to IDC, the shift up in the smartphone price chain was driven by attractive trade-in offers and interest-free financing, saying, “Apple’s ongoing success and resilience is in large part due to the increasing trend of premium devices, which now represent over 20% of the market.”

Despite Apple’s success in climbing to the top of sales in the global smartphone market, it has not been immune to the broader decline in smartphone sales.  Sales of the iPhone 15 in China are significantly lower than sales of its predecessor, the iPhone 14.  Also, some analysts expect Apple’s iPhone sales slump in China to deepen.  Jeffries recently said Apple saw a double-digit fall in sales volume in December, and it forecasts a similar decline in 2024. Jeffries said that discounts on Apple’s smartphone range increased across various online shopping portals, cutting into the average selling price without stimulating growth in volume.

On Monday, Apple announced it is offering discounts of as much as 5% on its newer iPhones in China for the first time in years as it tries to counter weak Chinese demand. One of the main challenges for Apple is competition from Huawei Technologies, which has grown in popularity in China after the Chinese government widened its ban on the use of Apple products, which depressed Apple’s sales and boosted Huawei’s sales. Last year’s release of Huawei’s Mate 60 Pro smartphone, which runs on a new made-in-China system processor, spurred patriotic sales in China as the company reclaimed some of the customers it previously lost to Apple.  Jeffries estimates Huawei shipped 35 million smartphones in 2023, with some supply constraints preventing that number from being larger. 

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