12:31 PM EDT, 07/01/2024 (MT Newswires) -- Apple ( AAPL ) offered discounts during China's "618" shopping festival but it was not enough to mitigate share loss in the region as iPhone sales remained flat in a market growing by 11%, UBS said in a note Sunday.

Analysts, including David Vogt, said that Apple's ( AAPL ) market share in China fell to more than 15% in May from nearly 17% last year. This loss to Huawei and other Chinese brands is limiting iPhone growth, with Huawei's year-to-date share in China rising to roughly 16% year-over-year while iPhone's dropped by 3.6 percentage points.

During the latest iPhone cycle with the 5G iPhone 12, Huawei's smartphone sales in China fell about 60% due to technology restrictions, while Apple's ( AAPL ) grew by 36%. However, with Huawei's renewed product lineup, this advantage for Apple ( AAPL ) is not expected to continue, the analysts added.

In May, iPhone sales were weak, dropping 2% from a year earlier, marking the fifth straight month of annual decline. The US saw a 16% drop, while Europe saw a rare uptick due to a mini-upgrade cycle after 19 months of declines starting in December 2021. iPhone sales in India dropped by about 7% year-over-year in a market also declining by around 7%, while the iPhone's market share in the country remained unchanged, the analysts said.

UBS has a neutral rating and a $190 price target on Apple ( AAPL ).

The price target reflects the company's "challenging growth backdrop, higher rates, and undefined artificial intelligence strategy," the analysts said.

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