Apple relinquished its position as China’s leading smartphone vendor in 2024. Domestic competitors Vivo and Huawei surpassed the tech giant as iPhone shipments in the country plummeted by 17%, according to recent data from Canalys. This represents Apple’s steepest annual decline in Chinese smartphone sales since 2016, with contractions observed across all four quarters, culminating in a 25% drop in the final quarter.
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Vivo and Huawei Surge Ahead in China’s Competitive Landscape
Throughout 2024, budget-friendly smartphone manufacturer Vivo secured a 17% market share in China. Premium rival Huawei followed closely with 16%, while Apple trailed with 15%. This shift underscores the intensifying pressure Apple faces from local brands in one of its most crucial global markets. The absence of features like advanced AI capabilities comparable to those offered by competitors, particularly relevant in a market where ChatGPT remains unavailable, has contributed to Apple’s declining competitiveness.
Image of Vivo and Huawei smartphones
“This marks one of Apple’s worst annual performances in China,” commented Canalys analyst Toby Zhu. Zhu attributed Apple’s struggles to several factors, including “Huawei’s continuous flagship releases, the proliferation of domestic foldable phones in high-price segments, and Android brands like Xiaomi and Vivo building consumer loyalty through technological innovations.”
Huawei’s Resurgence and Apple’s Response
Apple had previously enjoyed a period of sustained growth following U.S. sanctions imposed on Huawei in 2019. However, Huawei has staged a significant comeback in the premium segment since August 2023, fueled by the launch of new phones equipped with locally-sourced chipsets. Consequently, Huawei experienced a remarkable 24% surge in shipments during the fourth quarter.
In response to dwindling sales, Apple resorted to unusual discount strategies. A four-day promotional period in early January offered price reductions of up to 500 yuan ($68.50) on iPhone 16 models through official channels. Major Chinese e-commerce platforms amplified these efforts with even steeper discounts. For instance, Alibaba’s Tmall marketplace advertised discounts of up to 1,000 yuan ($137) on the latest iPhone 16 series.
Xiaomi’s Strong Growth in the Budget Segment
Among the top five vendors, predominantly budget-oriented Xiaomi demonstrated the most robust growth, boasting a 29% increase in fourth-quarter shipments. Oppo and Vivo also registered gains of 18% and 14%, respectively, according to Canalys data. This highlights the continued strength of the budget smartphone segment in China.
Conclusion: A Shifting Landscape in the Chinese Smartphone Market
Apple’s decline in the Chinese smartphone market signals a significant shift in the competitive landscape. The resurgence of Huawei, coupled with the innovative offerings of domestic brands like Vivo and Xiaomi, presents a formidable challenge for the American tech giant. While Apple has attempted to counter this trend with price cuts, the long-term implications for its position in the Chinese market remain to be seen. The ability to adapt to evolving consumer preferences and address the competitive pressure from local players will be crucial for Apple’s future success in China.
