Over the past year, Apple (NASDAQ:AAPL) has been grappling with numerous challenges in one of its most important markets: China. Trade tensions with the U.S. have spurred a sense of economic nationalism, with local smartphone buyers purchasing Chinese brands. Currency fluctuations have also taken a bite out of revenue once the yuan is converted back to U.S. dollars, hedging program notwithstanding.

Revenue growth has been in negative territory all year long, although Apple was able to squeeze out positive growth from its Greater China segment in the fiscal third quarter on a constant currency basis. One Wall Street analyst now believes that iPhone unit volumes in the Middle Kingdom plunged last month.

Six iPhone 11 units being splashed with water

Image source: Apple.

China shipments dropped an estimated 35% in November

Credit Suisse analyst Matthew Cabral put out a research note this week estimating that iPhone shipments in China fell over 35% in November, even as the broader Chinese smartphone market grew. That would represent further deterioration in volumes relative to October, according to Credit Suisse's estimates. Cabral derives his estimates based in part on data from China's Ministry of Industry and Information Technology.

"We recognize monthly data can be volatile and the shift in launch timing versus last year is likely skewing year-over-year compares; however, the drop in November marks the second straight double digit decline (-10.3% year over year in October) and total shipments in China since the launch of the iPhone 11 family are now down 7.4% year over year (September to November)," the analyst wrote.

Last year, Apple launched the iPhone XS and XS Max in September, a month before the more affordable iPhone XR became available. In contrast, the entire iPhone 11 lineup this year launched in September, receiving a tepid reception.

More tariffs are potentially just days away

Making matters worse, the Trump administration's proposed tariffs on China are set to go into effect just days from now on Dec. 15. That wouldn't directly impact Apple's iPhone shipments into China, but it underscores some of the geopolitical headwinds that the Cupertino tech giant has to navigate.

CEO Tim Cook has been strategically wooing President Trump in an effort to secure tariff exemptions, and the tweeter in chief has cryptically tweeted that the two countries may be nearing an agreement. Trump has also said he's open to granting Apple exclusions.

That could potentially entail eliminating the latest round of tariffs altogether, according to CNBC, which would be a welcome reprieve from additional taxes for U.S. importers like Apple. For what it's worth, Credit Suisse is optimistic that Apple will be able to avoid additional tariffs, which would also be hard to pass along to consumers in the form of higher prices seeing as iPhones are already extremely expensive.

Cook tried to deflect attention from iPhone volumes in China on the last earnings call, expectedly pointing to the company's booming services segment. "It's not all about iPhone in China," Cook said. "The services area grew double digit[s]."