Analyst Kuo predicts that Apple's market share in China will decrease due to a decline in iPhone shipments.

• On Friday, Ming-Chi Kuo, an analyst, stated that Apple is experiencing a decrease in market share in China because of declining iPhone shipments.
• Although the new iPhone SE4 is expected to launch, it is predicted that iPhone shipments will decline by 6% in the first half of 2025, according to a report.
• Apple shares slid 2.4% on Friday.

Due to declining iPhone shipments, Ming-Chi Kuo wrote in a report on Friday that Apple is losing market share in China. The stock slid 2.4%.

According to Kuo, an analyst at TF Securities, Apple has taken a cautious approach when discussing 2025 iPhone production plans with key suppliers. Despite the anticipated launch of the new iPhone SE4, shipments are predicted to decline by 6% year-over-year in the first half of 2025.

Apple's market share is predicted to decline further, as the upcoming iPhones are expected to be extremely thin, potentially limiting their compatibility with physical SIM cards, which is not popular in China.

Unless their design is modified, these two models may face shipping momentum challenges.

In December, although overall smartphone shipments in China remained constant compared to the previous year, iPhone shipments decreased by 10-12%.

According to Kuo, there is no evidence that Apple Intelligence is driving hardware upgrades or services revenue. He wrote that the feature has not boosted iPhone replacement demand, as per a supply chain survey he conducted. Furthermore, Kuo believes that the feature's appeal has significantly declined compared to cloud-based AI services, which have advanced rapidly in subsequent months.

According to Kuo, Apple's estimated iPhone shipments for 2024 are approximately 220 million units, while for this year, the range is between 220 million and 225 million. This is below the market consensus of 240 million or more units.

Apple didn't immediately respond to a request for comment.

WATCH: Apple has to do something to justify its run-up