Apple Loses Smartphone Leadership in China as Local Brands Surge

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Apple has been dethroned as the leading smartphone seller in China for the first time in four years, according to data from Canalys. In 2024, Apple's market share dropped to 15%, down from 25% the previous year. This decline coincides with a significant 17% decrease in annual shipments, marking Apple's largest-ever annual sales drop in China, which includes a staggering 25% fall in the fourth quarter alone.

Local competitors Vivo and Huawei have capitalized on this downfall, capturing 17% and 16% market shares, respectively. Canalys analyst Toby Zhu noted that Apple faces increasing challenges in the premium segment from both domestic brands and a growing lineup of innovative foldable phones from competitors Xiaomi and Vivo. Factors such as the lack of artificial intelligence features in the latest iPhone models have further eroded Apple's competitive edge in a market where AI capabilities are increasingly prioritized.

In response to the heightened competition, Apple has initiated promotional discounts for its iPhone 16 models. The company's efforts to stimulate sales included a four-day discount event that offered up to 500 yuan off its flagship devices. Despite these attempts, the market environment remains challenging.

Apple's struggles in China are particularly notable given that the company enjoyed four consecutive years of growth following the U.S. sanctions that impacted Huawei. However, since releasing new phones with domestically-produced chipsets in August 2023, Huawei has seen a resurgence in the premium market.

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