Apple Takes China's Smartphone Crown, but Memory Prices Threaten the Run

Apple's iPhone 18 Pro series went on sale on September 18, and three days later the company sat at the top of China's smartphone market. Counterpoint Research found first-three-day sales of the Pro models were 12% higher than the iPhone 17 Pro line managed across its entire first week, according to the South China Morning Post.

That is the newest hard number in the dossier, and it lands in a market that has been shrinking. Counterpoint's Ivan Lam told SCMP the delayed launch of the base iPhone 18 likely pushed some buyers up to the Pro tier, and that price rises of more than US$200 on many Chinese flagship models raised the price anchor enough to make the iPhone look relatively cheaper.

The catch is component cost. Micron's fiscal fourth-quarter results, released on Wednesday, show where the pressure is coming from: the company booked $54.23 billion in revenue, up nearly five times year on year, at a record 87% gross margin. Its Mobile and Client unit, which serves consumer devices, posted an 88% operating margin, the highest of any unit, while shipping less memory than in the prior quarter, according to Tom's Hardware.

Memory is the input that phone makers cannot substitute. Huawei has already said more smartphone price hikes are coming because of the supply crunch (The Malaysian Reserve), and Indian appliance buyers have been pulling purchases forward ahead of expected increases (The Times of India). None of that shows up in Apple's launch-week figure, but it shapes what happens next.

Cars show how fast a policy-driven market can turn

Consumer electronics and autos are different businesses, yet both are now being priced against the same memory and battery supply chains, and both are being reshaped by subsidies that come and go. The clearest illustration this week is in electric vehicles.

Tesla reported third-quarter deliveries of 486,532 vehicles on Friday, down 2.13% year on year but about 4.91% above the market estimate of 463,761, according to CnEVPost. BYD sold 762,478 passenger battery-electric vehicles over the same period, widening its lead from roughly 77,000 units in the second quarter to 275,946. InsideEVs noted Tesla's own quarterly volume is essentially flat against 2023.

In the US, where the $7,500 federal tax credit expired a year ago, the drop is sharper. Ford's EV sales fell 80% in the third quarter to 6,047 units, with just 289 F-150 Lightnings sold, Electrek reported. GM's EV deliveries fell to 25,473 from 66,501 a year earlier, and the Chevy Equinox EV alone dropped 92% to 1,905 units, per InsideEVs. Volvo pulled its full-year volume and cash flow guidance after global sales fell 10.7%, InsideEVS reported on Friday, with China down 40.6%.

Hybrids absorbed some of that demand. Toyota said 61% of its US third-quarter sales were electrified, up 28.5% year on year, InsideEVs reported, and Gizmodo put the Toyota-brand figure at just over 60%.

China's domestic picture is softer than the export story. NEV retail sales fell 20% year on year in the first 27 days of September, per CPCA data via CnEVPost, and GWM's September sales slid 13.99%.