- Apple has made significant cuts to its iPhone shipments to China in November
- It cut iPhone shipments by 35 percent, the second straight month of declines
- Analysts suggest the cuts were made in anticipation of new tariffs
Apple shipped 35 percent fewer iPhones to China in November, its second straight month of double-digit declines in the country
In spite of declining iPhone sales, Apple’s revenues have continued to grow on the strength of its services, which include subscriptions to Apple Music, iCloud, and AppleTV+
iPhone shipments to China fell by 35 percent in November, the second straight month of double-digit declines in the country compared to the same periods the previous year.
According to a new report from Credit Suisse analyst Matt Cabral, the total iPhone shipments since the release of the iPhone 11 on September 20, 2019 are down more than seven percent compared to the same period in 2018.
These declines have come at the same time as the Chinese smartphone market has continued to growth, though at a slower rate than in the past.
According to a CNBC report, the declines could be attributed to an upcoming December 15 deadline, after which new tariffs up to fifteen percent as part of the ongoing US-China trade war.
Analysts estimate that these additional tariffs could raise the price of iPhones in China by as much as $70.
A base-level iPhone 11 with 64GB of storage costs around $775, or 5,499 yuan, while the same model currently costs $699 in the US.
Apple has seen declines in Chinese shipments throughout the year, something that some analysts had expected the launch of the iPhone 11 to reverse.
In the second quarter of 2019, Apple’s shipments to China declined by fourteen percent, while its smartphone market share in the country went from 6.4 percent to 5.8 percent.
The declines come at a time that the iPhone sales make up a smaller part of Apple’s yearly revenue.
In an October earnings call, the company announced record breaking $64billion in revenue in spite of a nine percent decline in iPhone sales.
The company reported its main sources of growth came from services, which include revenue from subscriptions to iCloud, Apple Music, Apple Arcade, Apple TV+, alongside revenue from App Store and Apple Pay transactions.
Apple recently expanded its range of services by introducing a credit card that will allow customers to buy a new iPhone with no interest for 24 months.
Apple rolled out its virtual credit card on in August, working with bank Goldman Sachs Group.
Apple announced the card in March, aiming to draw in iPhone owners by offering a card with 2 percent cash back on purchases with the Apple Pay service, no fees, an app to manage related finances, and a focus on data privacy.
The card is designed to work with the iPhone, where users sign up for the card and can start using it immediately if approved via the Apple Wallet app and Apple Pay system.
Apple offers an option for a physical card made of titanium, but the physical card has no visible number.
Instead, the card’s number is stored on a secure chip inside the iPhone, which generates virtual numbers for online or over-the-phone purchases requiring a number.