TMTPost -- Initial statistics showcased Apple Inc.’s latest iPhone series notched strong sales in China, gaining traction in the world’s largest smartphone market despite challenge from local rivals including Huawei Technologies Co.

Credit：Apple

Sales of the iPhone 16 in China surged 20% in the first three weeks since their launch compared with its predecessor last year, according to Counterpoint Research. The premium models were doing particularly well as sales of the Pro and Pro Max jumped 44% compared with their equivalent 2023 versions, data from the the global market research firm showed.

Counterpoint analyst Ivan Lam believed base effect may play a role in the strong sales of iPhone 16, noting production issues hampered the iPhone 15 family early on. Performance of the iPhone 16 series is still uncertain considering Huawei’s high-profile smartphone--the tri-foldable Mate XT went on sale in China on September 20, the same day with Apple’s latest devices, highlighting Huawei’s direct competition with its U.S. competitor.Lam said Huawei’s device continued to sell well at the homeland market.

However, Lam admitted Apple achieved notable improvement of iPhone sales, at least from its new smartphones. “Given the smooth production ramp-up, consistent pricing strategy, and the initial wave of upgrades by existing iPhone users, the iPhone 16 series has experienced substantial growth in the Chinese domestic market,” Lam said. “The product mix has also improved markedly.”

Analysts from Wedbush said they believe this iPhone upgrade cycle could be a “historic” one. “China sales for iPhone 16 will show a strong rebound over the next year with the beginning of this AI-driven supercycle,” they wrote in a note recently.

The latest data allayed concern over iPhone 16 as analysts’ estimates of preorders in September flagged weak sales.  "The key factor is the lower-than-expected demand for the iPhone 16 Pro series,"  concluded Ming-Chi Kuo, an analyst at TF International Securities who is well known for his accurate predictions on future Apple products. Kuo estimated Apple received about 37 million units of iPhone 16 series preorders at the first weekend of sales, decreasing around 12.7% from last yera’s iPhone 15 series first weekend sales.

Another sign of lower-than-expected demand Kuo noted is that the shipment increase before the preorder. The delivery times of the iPhone Pro series are significantly shorter than those of the previous premium version. The significant YoY growth in shipments before pre-order for iPhone 16 Pro Max is due to improved tetraprism camera production yields and Apple’s optimistic outlook for demand for this model, Kuo noted.

One of the key factors resulted in the lower-than-anticipated demand for iPhone 16 Pro series is that the major selling point, Apple Intelligence, is not available at launch alongside the iPhone 16 release, according to Kuo. He added intense competition in the Chinese market continues to impact iPhone demand.

Analysts from Barclays, J.P. Morgan, Bank of America (BofA) and Jefferies said in their notes on September 16 that iPhone 16 pre-orders are seeing shorter estimated delivery times than last year's new iPhone series, which could result from factors including both higher U.S. supply and lower demand.

Based on their conversations with distributors and analysis of pre-order figures on major Chinese e-commerce sites, total pre-order units were down year-over-yera (YoY) within the first couple of days, with a lower pro model mix, according to Barclays analysts. JPMorgan analysts said iPhone 16 Pro preorders were "modestly slower vs. last year." Meanwhile, preorders for the standard iPhone 16 models during the first weekend were in line with last year's iPhone 15 launch, in terms of  key markets’ delivery lead times as a demand indicator.

Despite the decline in preorders of the iPhone 16 Pro series in the first weekend, Kuo believes Apple still has opportunities to improve sales through the release of Apple Intelligence and peak season promotions, citing the Double 11 event in November in China and the year-end holiday season in America and Europe. Sales during these critical periods will be key points to watch for changes in iPhone demand, Kuo said. If Apple Intelligence releases in the last quarter of this year and peak season promotions have a limited effect on iPhone 16 shipments, Apple will implement more aggressive iPhone product strategies in 2025 to stimulate market demand, Kuo expected.