According to Longbow Research (via Bloomberg), Apple is still facing challenges in the China market as far as iPhone sales are concerned. They track search volumes on the Chinese search engine Baidu and note that iPhone searches are almost half what they were a year ago.

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Search volume can be used as an indirect proxy for consumer interest, as typically lower searches for a product mean that fewer people are looking to buy them.

A 47% fall in people searching for the iPhone on Baidu therefore implies the iPhone XS and iPhone XR are still not catching fire with Chinese customers. We have already seen Apple repeatedly discount its latest models in China a few times so far in this product cycle.

Longbow analysts do not see the discounts as making much of an impact.

“Multiple iPhone price cuts did not stop China iPhone search trends from weakening further while February supplier sales were abysmal, decelerating on a year over year basis vs. January,” Harrison wrote in a research note Tuesday. Of 42 Apple suppliers, he wrote, 37 of them “reported worse than seasonal sales” in February.

A 47% year-over-year drop in search volume is a slight improvement over the 50% drop seen in January. Nevertheless, Longbow says that there are no signs of iPhone demand acceleration on the horizon. Other analysts are more optimistic, with Ming-Chi Kuo indicating that the ‘worst is over’, although that took global iPhone demand into account. For its part, Apple largely blames lower sales in China on macroeconomic factors.

The stock market has turned relatively bullish on AAPL stock in recent days, as many analysts look to potential growth in Apple Services to offset the flat/negative sales growth in iPhone shipments. Apple announced its March 25 event yesterday where it is expected to unveil premium news and original content television services. Indeed, Apple’s share price has risen 5% this week alone, and hit highs of $182.67 today.

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