Apple iPhone shipments in China fell about 33% in February from a year earlier, according to official data, extending a slump in demand for the flagship device in its most important overseas market.

The government figures showed foreign brands shipped only about 2.4 million smartphones last month, which was affected by the later timing of the Lunar New Year. Apple accounts for the vast majority of those shipments, as the only overseas player with a meaningful market share.

The February decline marks a second consecutive month of lower shipments. In January, the company shipped a total of roughly 5.5 million units, or about 39% fewer handsets than in the prior year, according to China Academy of Information and Communications Technology figures.

Cupertino, California-based Apple has seen its best-selling product struggle in the world’s biggest smartphone market since the September debut of its latest generation models. The return of Huawei Technologies as a viable rival in the premium phone segment has stolen share away from Apple and the slowdown in iPhone sales prompted rare discounts from the US company in January.

“Apple’s retail channels in China are still digesting the shipment from the fourth quarter of 2023, that could explain the drop in recent months,” said Nicole Peng, an analyst at Canalys. “But it’s a sign of a slowing trend for the upcoming months for Apple in China, especially when the Chinese peers are driving very aggressively the AI smartphone messages.”

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The overall Chinese smartphone market also contracted by almost a third in February, illustrating a wider consumer reluctance to spend on discretionary items. Analysts still predict growth over the course of the year, but they expect iPhone sales to keep deteriorating. Jefferies analysts led by Edison Lee said in a note this week that they see the iPhone leading market declines with more than 20% for the year so far. — (c) 2024 Bloomberg LP