Foxconn, Apple’s main supplier, is ramping up its hiring efforts to prepare for the highly anticipated launch of the AI-compatible iPhone 16 this autumn. Apple expects high demand for the iPhone 16 due to its new AI features and aims to meet these projections.

Foxconn is offering attractive hourly wages and bonuses to attract workers. In Zhengzhou, the hourly rate is 25 yuan (US$3.44), and returning workers can earn bonuses of up to 7,500 yuan. This is an increase from the 6,000 yuan bonus offered just a month ago. Local labor agencies promote these high-paying jobs for temporary and returning employees.

In Shenzhen, Foxconn is also boosting its workforce. Temporary workers are being offered an hourly wage of 21-22 yuan, while returning permanent workers can earn up to 6,000 yuan monthly for the first three months, with potential pay rises for longer stays.

iPhone 16 Features and Expectations

The new iPhone 16 is expected to feature advanced AI capabilities through the Apple Intelligence platform, which was announced at the WWDC in June. This innovation is likely to drive a wave of device upgrades among consumers. Apple aims to ship at least 90 million iPhone 16 units in the second half of the year, targeting a 10% growth compared to the previous generation.

Apple, which led smartphone sales in mainland China in Q4 last year, is currently ranked third behind Vivo and Honor. Despite experiencing a 19.1% sales drop in Q1, Apple saw a 2.7% year-on-year sales increase during the midyear online shopping season, thanks to substantial discounts.

During the 618 e-commerce promotion (May 20 – June 20), overall smartphone sales in China increased by 6.8% year-on-year. Huawei saw a significant 42.4% year-on-year sales increase, while Apple’s sales grew by 2.7% due to discounts of up to CNY 2,350 (US$326).

Foxconn’s intensified hiring efforts are crucial as they gear up for the iPhone 16 launch. With new AI features expected to drive consumer interest, Apple is poised to maintain its competitive edge in the market and meet its ambitious sales targets for 2024.

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(via)

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Apple is encountering challenges, as sales decline significantly in the crucial Chinese market. Tim Cook, Apple’s CEO, recently acknowledged the challenges posed by what he described as “the most competitive market in the world.”

The latest figures reveal a significant decline in iPhone sales both globally and specifically in Greater China, including Hong Kong and Taiwan. Global iPhone revenue dropped by 10% in the first quarter, marking the most substantial decrease since late 2020. In Greater China, iPhone sales fell by 8% to $16.4 billion during the same period.

Apple’s market share in China’s smartphone market has been steadily decreasing, with iPhone sales plummeting by 19.1% in the first quarter alone. This decline has seen Apple slipping to the third position in the market, capturing 15.7% of the domestic market, behind competitors like Vivo and Honor.

Meanwhile, Huawei, Apple’s Chinese rival, has experienced a surge in smartphone sales, with a nearly 70% increase in the first quarter. Huawei’s market share now closely trails Apple’s at 15.5%, with the company’s net profit soaring by an impressive 564%.

Huawei’s success can be attributed in part to patriotic sentiment, particularly following the release of the Mate 60 series phones, powered by domestically produced chips. The latest Pura 70 series phones from Huawei, equipped with China-made processors, are posing significant competition to Apple’s iPhone 15 and 16 series.

Despite these challenges, Tim Cook expressed confidence in China’s long-term potential for Apple. The company is making substantial investments in artificial intelligence (AI) development, with Cook hinting at an upcoming AI strategy reveal at Apple’s annual Worldwide Developers Conference scheduled for June.

While Apple’s financial performance saw a decline due to the slump in iPhone shipments, executives downplayed its significance, attributing it to difficult year-over-year comparisons. Analysts, however, raise concerns about Apple’s performance in China, where intense competition from Huawei is impacting iPhone shipments.

Apple remains heavily reliant on iPhone sales, contributing about 52% of its total revenues. Despite efforts to diversify, other product categories like Mac computers saw only modest growth, insufficient to offset the overall revenue decline.

In response to questions about the impact of investments in generative AI, Cook emphasized Apple’s focus on services, which saw significant growth in the March-ending quarter. However, questions linger about the ability of a hardware company like Apple to effectively monetize software features amidst fierce competition in the Chinese market.

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(via)

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Apple is working on building a local supply ecosystem in China for iPhones sold strictly in that region. A new DigiTimes report stated that the company is looking to add more China based manufacturers for the local market.

One such manufacturer includes Luxshare, which has already set up manufacturing plants in China from Taiwan’s Wistron. Another Chinese firm is Lens Technology, who is sourcing metal chassis plants from Taiwan as well, to expand the iPhone’s presence. Furthermore, the Cupertino based giant is also continuing to add more Chinese suppliers to source its iPhones.

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For those unaware, Luxshare is already a part of Apple’s supply chain for the popular AirPods. Although now, it has become a bigger partner in the smartphone maker’s product ecosystem. So far, Apple has mostly employed Taiwanese firms in this position that have dominated its supply chain, but this might shuffle up the sourcing structure in Asia. Notably, India has also become a site for iPhone 11 production, marking the first time Apple is producing a flagship device outside of China.

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Apple announced the shiny new iPhone 11 series yesterday. The new models are all set to hit the markets starting September 20, including in China. iPhones have traditionally been very popular among the Chinese in the premium segment, but things have changed in the past couple of years. Q1 2019 smartphone shipment report from China reveals that Apple’s shipments declined by a solid 30% YoY. Even in Q2 2019, the company’s shipments declined by 6% YoY.

Will the new iPhones change this trend?

While we can’t be sure whether the new iPhone 11 series will change Apple’s performance in China, what we do know is that the Cupertino giant is entering the market with a big disadvantage right from the start. At the iPhone 11 unveiling event yesterday, Apple failed to mention anything related to 5G. And considering how China has bet big on the new 5G technology, it’ll be a big drawback for the new devices.

China’s three major carriers are expected to roll out 5G in major cities by the end of 2019. There are already a handful of 5G Android phones available in the market, giving users the opportunity to connect to this high-speed network technology. But without 5G support, the new iPhones could find it hard to take on the likes of the upcoming Mate 30 Pro 5G or the Xiaomi Mi 9 Pro 5G, despite its cheaper starting price.

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But Its Not Just About 5G

The ongoing trade war is yet another big issue for Apple in China. All thanks to the trade ban on Huawei, the nationalist sentiment is on the rise in China. This means a lot of people would prefer buying smartphones from companies like Huawei and OPPO instead of non-Chinese ones like an iPhone.

Also, in terms of features and experience, Android phones have come close to and even sometimes surpassed the iPhones. For example, there was a time when iPhones had no competition in the camera department. But with the recent advancements from companies like Huawei and Samsung, we have some really powerful camera flagships in the Android ecosystem.

In fact, Chinese Android phones now offer better and more advanced features than iPhones. For example, Xiaomi recently unveiled the world’s fastest wireless charging technology with 30W fast charging. Huawei’s RYYB sensor on the P30 Pro has taken its camera prowess to new heights. Then there’s Vivo experimenting with the display on its phone to make them nearly bezel-less. All the new advancements are available to Chinese customers first, at a price that’s less than the top-end iPhones.

Also, Huawei’s efforts to capture nearly 50% of the Chinese market would also adversely affect Apple’s performance in the region. The Chinese telecommunications giant has doubled its efforts to expand in the Chinese market after facing an uncertain future from the US ban. Even its new Mate 30 Pro flagship is expected to first go on sale in China. The international release could likely be delayed.

Will the Cheaper iPhone 11 Pricing Help?

Apple made a smart move by keeping the pricing of the iPhone 11 cheaper than its predecessor. But it still isn’t affordable in the Chinese market.

For example, when the P30 Pro was officially announced in China back in April, its 8GB+128GB started at 5488 Yuan in China. The base variant of the new iPhone 11 (dual-cameras) with 64GB storage starts at 5499 Yuan.

See the issue here? When the Mate 30 Pro will be officially announced in China later this month, it will be priced very close to this figure. And the phone will come with 5G support, a large battery, super-fast charging, one of the best cameras in the world, as well as a powerful AI chipset. Plus, its a Chinese smartphone, which means you support your home country when you purchase the device.

Considering these factors, Apple may not have an easy time selling its iPhones in China, at least not in the figures like it used to a few years back.

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What Will Be Apple’s Counter Attack?

Daniel Ives, an analyst at WedBush states that about a third of the 900 million iPhone users across the globe are due for an upgrade in the next 12 to 18 months. Also, around 60 to 70 million Chinese consumers are due for an upgrade which could help push iPhone 11 series sales in the coming months.

Also, even if Apple doesn’t do as well as in China as it did back in its glory days, the company is still likely to profit internationally due to the ongoing trade war. With Huawei banned from using Google services on its phones, its international sales could take a hit. This opens up an opportunity for Apple to capture Huawei’s market share in the premium segment.

Also, a cheaper iPhone is reportedly in the works and is said to release next year. That could come as a respite for iOS users who are looking to upgrade to a new iPhone model but don’t want to spend a fortune buying one.

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