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Investing.com -- iPhone demand in China remains weak, Jefferies said Wednesday, citing their recent industry checks.
The report highlighted a 12% year-over-year (YoY) decline in iPhone shipments, contrasting with a 1% growth in local brands during January and February of 2025.
Despite a 33% increase in overall smartphone shipments in February, driven by the timing of the Chinese New Year, the combined shipments for January and February fell by 1%.
The decline in iPhone shipments compares against the backdrop of a modest 1% estimated growth in sell-through for the same period, signaling “a slight fall in inventory,” Jefferies analysts said.
On a six-month rolling basis, iPhone’s inventory days have decreased marginally from 21.4 to 20.9 days, while Android brands, including Huawei, have seen a more significant drop from 21.2 to 18 days, indicating stronger demand for Android and Huawei devices compared to the iPhone.
The introduction of the iPhone model 16e (SE4) in January has not spurred a recovery in iPhone sales, analysts noted.
With shipments of the new model starting on February 28, the impact on January and February sales figures was negligible. However, Apple (NASDAQ:AAPL) had set aggressive production targets for the 16e, potentially amounting to 7 million units in the first quarter.
“Therefore, we expect iPhone’s shipment to rise significantly in March. However, we believe demand for 16e is weak, since est. iPhone sell-through in China in March continued to be down by mid-teen %,” the analysts led by Edison Lee continued.
This trend could lead to the risk of order reductions for the 16e in the second quarter of 2025, which aligns with Jefferies’ earlier projections.
Moreover, the tracking of online platforms indicates that discounts on the iPhone 16 series have decreased, which could further dampen sales.
Given these factors, Jefferies expects iPhone inventory days to rise in the coming months until potential order cuts are made, as Apple navigates the balance between volume and profit margins.