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Foreign Phone Sales in China Drop Nearly 10% in May Amid Rising Local Competition

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Sales of foreign-branded smartphones in China, including those from Apple Inc., fell 9.7% year-on-year in May, according to data released on Friday by the China Academy of Information and Communications Technology (CAICT).

Total shipments of non-Chinese brands dropped to 4.54 million units in May, compared to the same month in 2023. Although CAICT did not provide a breakdown by company, Apple’s dominant share among foreign players means its performance heavily influenced the overall decline.

The data highlights the intensifying competition foreign manufacturers face from domestic brands like Huawei, Xiaomi, and Honor. Apple has been particularly impacted, prompting the tech giant to implement aggressive pricing strategies, including discounts of up to 2,530 yuan ($351) on iPhone 16 models through Chinese e-commerce platforms.

Meanwhile, the broader Chinese phone market also saw a significant contraction. Total smartphone shipments in the country fell 21.8% year-on-year, with 23.72 million units sold in May.

Analysts say the data reflect both weak consumer demand and a growing shift toward homegrown technology, amid rising geopolitical and market pressures.

Analog Devices Forecasts Strong Sales, But Auto Segment Tariff Boost Raises Sustainability Questions

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Analog Devices (ADI) on Thursday projected third-quarter revenue of $2.75 billion (± $100 million), beating Wall Street estimates of $2.62 billion, according to LSEG data. However, investor concern over tariff-driven demand in the automotive segment led to a 5% dip in shares after the announcement.

The chipmaker cited high-single-digit “pull-in” demand from automakers looking to stockpile semiconductors ahead of U.S. tariff changes, contributing to a 24% year-on-year jump in automotive sales, which reached $849.5 million for the May quarter. Yet, Analog Devices warned that auto revenue is expected to decline sequentially in the third quarter, triggering concerns about the durability of the rebound.

“While it’s difficult to delineate what was pull-in versus normal, our estimate for pull-in upside is in the high-single digit range,” said an ADI executive during the earnings call.

Broader Trends in Analog Chip Demand

The report follows a broader industry trend, with Texas Instruments last month also forecasting above-consensus revenue, signaling a revival in analog chip demand after quarters of inventory correction. Analysts believe restocking activity is now underway.

“Inventory had been really drawn down, so now we are seeing a restocking,” said Daiwa analyst Lou Miscioscia.

Despite the strong headline numbers, Stifel analyst Tore Svanberg noted investor concern around the temporary nature of auto demand driven by tariff policy rather than organic growth.

Consumer Segment Surges

ADI also reported a 30% jump in sales in its consumer segment, fueled by a rebound in personal electronics demand. According to Canalys data, global PC shipments rose 9.4% in Q1 2025 as manufacturers accelerated deliveries ahead of expected tariff hikes.

For Q3, Analog Devices forecast adjusted earnings per share of $1.92 (± $0.10), also ahead of consensus.

Nintendo Forecasts 15 Million Switch 2 Sales, Sees 13% Profit Rise Despite Tariff Risks

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Nintendo expects to sell 15 million units of its upcoming Switch 2 console in the fiscal year ending March, projecting a 13% increase in operating profit to 320 billion yen ($2.22 billion) amid ongoing global trade tensions.

Key Highlights:

  • Switch 2 Launch: The successor to the original Switch, which sold over 150 million units since 2017, will debut on June 5. It will feature improved graphics and a larger screen.

  • Tariff Concerns: Nintendo paused U.S. pre-orders temporarily due to uncertainty over President Trump’s tariffs, but resumed after deciding to keep the U.S. retail price at $449.99.

  • Profit Outlook: Although Nintendo expects a profit hit in the tens of billions of yen from tariffs, it anticipates a solid rebound from last year’s 46.6% drop in operating profit to 282.5 billion yen.

  • Software Expectations: Nintendo forecasts 45 million Switch 2 software sales, alongside 4.5 million units of the original Switch and 105 million software units for that aging system.

  • Launch Titles: Switch 2 will debut with anticipated games including “Mario Kart World”, expected to boost early adoption.

Market Context:

  • Analysts like Serkan Toto of Kantan Games believe Nintendo’s forecast is conservative, with potential demand pushing sales closer to 20 million units.

  • The Switch 2 arrives as competitors Sony and Microsoft increase their console prices, potentially making Nintendo’s launch more appealing.

Despite ongoing trade war risks and pricing sensitivities, early signs suggest robust demand for Nintendo’s new hardware, which will be crucial for maintaining momentum in a business still heavily reliant on console sales.