Apple Loses Ground in China Smartphone Market

Apple has faced a significant setback in the Chinese smartphone market in 2024. The tech giant was dethroned as the leading smartphone seller in the country, with local competitors Vivo and Huawei surpassing its sales. According to data from research firm Canalys, Apple’s annual shipments in China fell by 17 percent. This decline marks Apple’s largest-ever annual sales drop in the region, highlighting the growing competition from domestic manufacturers.

Declining Sales and Market Share

In 2024, Apple experienced a dramatic decline in its market share in China. The company’s annual shipments decreased across all four quarters, culminating in a staggering 25 percent drop in the final quarter. This decline has allowed budget smartphone maker Vivo to capture a 17 percent market share, while premium rival Huawei secured 16 percent. Apple, once the dominant player, now holds only 15 percent of the market.

This shift in market dynamics underscores the increasing pressure Apple faces from local brands. The data reveals that Chinese consumers are gravitating towards more affordable options and innovative features offered by domestic manufacturers. Analysts note that Apple’s struggles are compounded by the absence of artificial intelligence capabilities in its latest iPhones. In a market where AI is becoming increasingly important, this lack of functionality has diminished Apple’s competitiveness.

Challenges from Domestic Competitors

Apple’s premium market position is under threat from several factors. Huawei’s resurgence in the premium segment has been particularly noteworthy. Since August 2023, Huawei has launched new phones equipped with locally-made chipsets, leading to a 24 percent rise in shipments in the fourth quarter. This comeback has intensified competition in the high-end market, where Apple has traditionally excelled.

Moreover, the proliferation of domestic foldable phones has created additional challenges for Apple. Brands like Xiaomi and Vivo are building consumer loyalty through technological innovations and competitive pricing. Canalys analyst Toby Zhu emphasizes that these developments pose multiple challenges for Apple, which has enjoyed a period of growth following U.S. sanctions against Huawei in 2019. The landscape has changed, and Apple must adapt to retain its foothold in this critical market.

Promotional Strategies and Market Response

In response to declining sales, Apple has resorted to rare discounts to stimulate demand. The company launched a four-day promotion in early January 2024, offering price cuts of up to 500 yuan (approximately $68.50) on its iPhone 16 models through official channels. Major Chinese e-commerce platforms, including Alibaba’s Tmall, have followed suit, announcing discounts of up to 1,000 yuan ($137) on the latest iPhone series.

Despite these efforts, the competition remains fierce. Among the top five smartphone vendors, Xiaomi reported the strongest growth with a 29 percent increase in fourth-quarter shipments. Oppo and Vivo also recorded gains of 18 percent and 14 percent, respectively. Overall, annual smartphone shipments in China rose by four percent year-on-year to 285 million units in 2024.

As Apple navigates this challenging landscape, it must find ways to innovate and regain its competitive edge in one of its most important markets. The company’s ability to adapt to changing consumer preferences and technological advancements will be crucial for its future success in China.


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