Apple’s iPhone has officially been dethroned from its position as the smartphone market share leader in China, according to a Monday report from Jefferies analysts.
The analysts said smartphone sales in China have showed positive growth year over year, driven primarily by high double-digit growth in Android sales led by Huawei, Xiaomi and Honor devices. But Apple’s iPhone has seen a significant, double-digit decline, and its volume growth year over year has been negative since the iPhone 15 launched, according to the analysts.
As a result, Huawei overtook the iPhone in the No.1 spot for market share.
“We believe weak demand in China would eventually lead to lower-than-expected global shipments of iPhone 15 in 2023,” the analysts wrote, adding that the trend suggests the iPhone will “lose” to Huawei next year.
Shares of Apple were down less than 1% Monday morning.
The Jefferies analysts wrote that Android’s volume growth can’t be chalked up to discounts and that discounts on iPhones, excluding the iPhone 15 models, have been stable, while the average discount for Android “is not high.”
The analysts noted that resale iPhone 15 devices are all “trading at discounts to official selling prices,” which also reflects the weak demand in China.
Additionally, analysts at Morgan Stanley cut their price target for Apple from $215 to $210 in a report Monday. The analysts said they are now “more guarded” about the company’s December quarter because of supply headwinds. They also cut their iPhone expectations for the quarter by 8%.
The Morgan Stanley analysts said they will be watching Apple’s total revenue, services revenue growth, gross margin and revenue growth in China from its September quarter, but that the December quarter guide “is what will matter most.”
Apple did not immediately respond to CNBC’s request for comment.
–CNBC’s Michael Bloom contributed to this report