Apple Slides After Jefferies Cuts Rating, China iPhones Sales Plunge In Holiday Quarter

Apple's shares fell in premarket trading after Jefferies downgraded the company from "Hold" to "Underperform" and slashed its price target from $211.84 to $200.75. The downgrade was due to underwhelming iPhone sales in China, which weren't boosted by AI hype, and the expectation that Q1 2025 revenue will unlikely be met. Independent research firm Counterpoint also revealed disappointing iPhone sales data in China, with sales declining 3.2% year-over-year in Q4 2024. The iPhone lost its top position as China's best-selling smartphone, falling to third place in the fourth quarter of 2024. Huawei took the top spot, followed by Xiaomi and Apple, with iPhone sales tumbling 18.2% year-over-year in the quarter. Apple faces intensifying market competition from Huawei and other Chinese brands expanding into the premium market. Counterpoint's data showed that Apple had about 17.1% market share last quarter. The report suggests that AI-equipped iPhones failed to excite Chinese consumers, who are increasingly gravitating toward cheaper domestic-made AI smartphones. Apple needs to find a way to compete with these low-cost, AI-equipped smartphones priced as low as $168.