Apple's iPhone sales in China took a sharp dive of 24% in the first six weeks of 2024, according to a recent report from research firm Counterpoint. The decline comes as the American tech giant faces intensified competition from domestic rivals, particularly Huawei.
During the same period, Huawei, Apple's chief competitor in China's premium smartphone market, saw a remarkable 64% increase in unit sales, catapulting it to second place in the market share rankings.
Reuters tells us that Apple's share of the Chinese smartphone market now stands at 15.7%, down from 19% in the same period last year, relegating the company to fourth place. Meanwhile, Huawei's market share expanded to 16.5% from 9.4% a year earlier, securing its position in second place.
The overall smartphone market in China shrank by 7% during this period, indicating a challenging landscape for smartphone manufacturers.
BEIJING, CHINA - SEPTEMBER 22: People look at and buy the newly launched iPhone 15 and other Apple products at a flagship store, on September 22, 2023 in Beijing, China. The iPhone 15 was officially launched in mainland China Friday, one of the worlds most valuable companys largest global markets.
Strong Competition from Huawei and Other Local Brands
One of the key factors contributing to Apple's decline in sales is increased competition at the high end from Huawei. Additionally, aggressive pricing strategies from Chinese brands such as OPPO, Vivo, and Xiaomi have put pressure on Apple in the mid-range market segment.
To counteract declining sales, Apple has begun offering subsidies of up to $180 on certain iPhone models through flagship stores on Tmall, Alibaba's major marketplace platform. This move follows previous discounts of up to 500 yuan offered on its official sites last month.
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Huawei's resurgence in the premium smartphone market can be attributed to the release of its Mate 60 series in August. Despite facing sanctions from the US government in 2019, which restricted its access to essential components and software, Huawei has managed to regain its dominance in China's smartphone market.
The success of Huawei's Mate 60 Pro 5G smartphone has fueled the company's resurgence, putting pressure on competitors like Apple and major domestic brands.
While Huawei experienced significant growth, its spin-off brand Honor also saw a modest 2% increase in unit sales during the first six weeks of the year. However, other Chinese brands, including Vivo, Xiaomi, and Oppo, experienced declines of 15%, 7%, and 29%, respectively.
Regulatory Challenges
In addition to facing stiff competition from Huawei, Apple has also encountered challenges on the regulatory front in China. In September 2023, the Chinese government banned central government officials from using Apple's iPhones and other foreign-branded devices for work, citing concerns about cybersecurity and reducing reliance on foreign technology.
Overall, the landscape of China's smartphone market is dynamic and competitive, with Huawei's resurgence posing a significant threat to Apple's dominance.
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