In China, local rivals have dethroned Apple as the top-selling smartphone manufacturer, according to Reuters. Apple has been atop the smartphone sales list in China since 2016. 2024 changed that narrative.
According to Reuters, sales data showed that iPhone sales lagged through all four quarters of 2024. China companies, namely Vivo and Huawei, have been eating away at Apple’s smartphone market share, with the latter boasting its own locally made chipset.
“This marks one of Apple’s worst annual performance in China,” Canalys analyst Toby Zhu said in the Reuters report. "Apple’s premium market position faces multiple challenges: Huawei’s continuous flagship releases, the proliferation of domestic foldable phones in high-price segments, and Android brands like Xiaomi and Vivo building consumer loyalty through technological innovations."
One of the reasons cited by Reuters is the lack of full-fledged AI capabilities. Apple has been making headway in this arena, but not without some issues along the way.
Issues With AI
Artificial intelligence (AI) will continue to be a persistent investing theme and Apple is no stranger to this competitive landscape. The company has already started to roll out its AI platform, but has had some recent hiccups. The latest news shows that some users are receiving bogus news alerts generated from its AI application.
“In the beta update, Apple said it is disabling the AI-generated feature for news and entertainment while it tries to fix the issue causing the technology to fabricate information — a problem often described as “hallucinations” within the industry. Similar software updates for Apple’s iPad and Mac computers are also in a testing phase,” AP News reported.
News like this could cause some sell-offs to occur. So far in 2025, Apple’s stock is down more than 5%. With that, traders can look at the Direxion Daily AAPL Bear 1X Shares (AAPD ) to capitalize on the short-term price weakness.
Despite these initial issues, they could prove to be short term. As is the case with new technology, there will be some initial technicalities that will arise, but resilient companies like Apple should be able to resolve them quickly. The iPhone maker is still the largest stock based on pure market capitalization. The notion is that eventually the company will right the proverbial ship. That said, when bullishness takes place, traders can exit their bearish positions and take the other side with the Direxion Daily AAPL Bull 2X (AAPU ).
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