Apple Smartphone Demand Surge in China: A Closer Look

Apple’s smartphone shipments in China rose nearly 40% in May from a year earlier, continuing a positive trend seen in April.

This information comes from data released by a research firm affiliated with the Chinese government, the China Academy of Information and Communications Technology (CAICT).

Significant Increase in Foreign-Branded Phone Shipments:

Shipments of foreign-branded phones in China increased by 1.425 million units in May, reaching 5.028 million units, compared to 3.603 million units a year earlier.

Although the data did not mention Apple, the company remains the dominant foreign phone maker in China’s smartphone market. This suggests that the substantial increase in foreign-brand phone shipments can be attributed to Apple’s performance.

Apple Competitive Landscape and Sales Strategy:

The surge in Apple’s sales follows a period of weak performance in the world’s largest smartphone market, driven by intense competition from local rivals such as Huawei in the high-end smartphone category.

Apple’s recent success is partly due to an aggressive discounting campaign on its official Tmall site in China in May. The campaign offered price cuts of up to 2,300 yuan ($316.71) on select iPhone models.

Growth Trends and Market Dynamics:

Apple’s sales increase in May extended its growth streak for the past two months, including a 52% jump in April. This marks a significant improvement from the first two months of 2023, when the company experienced a 37% slump in sales. Apple CEO Tim Cook had forecast iPhone sales growth in certain markets, including China, following an 8.1% drop in second-quarter revenue from the Greater China region.

The substantial price reduction in May, double the size of a discount offered in February, came after Huawei introduced its new series of high-end smartphones, the Pura 70, in April, following the launch of the Mate 60 last August.

Competitive Moves by Huawei:

Huawei overtook Apple in the first quarter as China’s No. 2 smartphone vendor. It is ramping up its retail strategy by opening more flagship stores and adding more retail distributors. Huawei’s spinoff brand, Honor, holds the top spot in the Chinese market.

Overall Market Performance:

According to CAICT data, overall phone sales in China increased by 16.5% to 30.33 million units in May. This broader market growth further highlights the competitive and dynamic nature of the smartphone industry in China.