Apple has fallen out of the top 5 ranking of smartphone vendors in China, marking the first time in years the iPhone maker has fallen so low in one of its most important markets. iPhone shipments in China in the three months ended in June declined 2% year-on-year, bumping Apple down to No 6 on Canalys’ list of top vendors by shipments, behind Vivo, Oppo, Honor, Huawei and Xiaomi. “It is the first quarter in history that domestic vendors dominate all the top five positions,” Canalys Analyst Lucas Zhong wrote. “Conversely, Apple is facing a bottleneck in mainland China.” The Chinese smartphone market, the world’s largest, is extremely competitive, with the top six brands competing for roughly 95% of the market. Apple is the last foreign brand standing in this group after Samsung Electronics lost relevance. iPhone sales have been slumping in China this year amid fierce competition from local vendors, including Huawei, which has experienced a resurgence in the higher-end smartphone market thanks to an advanced processor produced entirely in China that has ignited patriotic fervor at home.
“In the first half of the year, Huawei was the leader in the market despite the U.S. trade restrictions, further closing the gap with Apple in the over USD600 segment,” research firm IDC’s Senior Analyst Arthur Guo wrote in a report. Huawei, Vivo and Xiaomi all saw double-digit year-on-year growth in the second quarter, according to both Canalys and IDC. While the Android smartphone market in China grew 11.1%, Apple shipments this quarter decreased 3.1% from the same period a year ago, despite promotions that helped improve iPhone demand in the country, according to IDC, which also ranked Apple 6th in market share for the quarter. According to IDC’s data, Apple last dipped out of the top five in the third quarter of 2020.
A separate report from research firm Counterpoint that tracks sales instead of shipments offered a rosier outlook for Apple, placing the iPhone maker at No 2 in China for the quarter with a market share of 15.5%. It was closely trailed by Huawei at 15.4%, Xiaomi at 15.3%, and Honor at 15.2%. “Despite a single-digit year-on-year decline, Apple’s performance in the second quarter remains impressive,” said Counterpoint Senior Analyst Ivan Lam. “However, Apple is expected to experience a traditional slump in the third quarter, as consumers awaiting the release of the iPhone 16 may delay their upgrades.” Apple this year has repeatedly offered discounts, as steep as 23% at one point, through local retailers.
Apple Chief Operating Officer (COO) Jeff Williams visited China last week, meeting with officials in Beijing and Shenzhen, where he pledged to deepen the firms cooperation with the country. In Beijing, Williams was among American executives who met with Chinese Vice Premier He Lifeng and Foreign Minister Wang Yi as part of the first U.S. business delegation to visit China after the Third Plenum of the Communist Party earlier this month. The delegation also included executives from FedEx, Micron, and United Family Hospital. Williams also met with Meng Fanli, Shenzhen’s Communist Party Secretary, promising that Apple would increase its investment in the southern Chinese tech hub, praising the city’s smartphone supply chain, the South China Morning Post reports.
