Apple faces declining market share in China

Market data revealed that Apple’s smartphone shipments in China fell 19% in the first quarter of the year, the worst year since 2020. The iPhone maker suffered from Huawei’s new product launches in the premium feature.

In the first quarter of 2024, Apple experienced a notable decline in its market share in China, slipping to 15.7% from 19.7% the previous year. 

This shift brings Apple nearly on par with Huawei, whose sales surged by 70% during the same period, according to research firm Counterpoint.

Loss of Market Leadership

Apple’s position as the largest smartphone seller in China was overtaken by rival Vivo, relegating Apple to third place in the market. 

Huawei, whose market share jumped from 9.3% to 15.5% year-over-year, and Honor, a mass-market brand spun out of Huawei, occupied the top two positions.

Impact of Huawei’s Resurgence

The resurgence of Huawei has directly impacted Apple’s performance in the premium smartphone segment. Additionally, subdued replacement demand for Apple devices compared to previous years has contributed to the decline in market share, according to Counterpoint analyst Ivan Lam.

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Potential for Recovery

Counterpoint remains cautiously optimistic about Apple’s prospects in the second quarter, citing the possibility of new color options and aggressive sales initiatives that could propel the brand back into positive territory. 

The firm observes slow but steady improvement in weekly iPhone sales.

China: A Significant Market for Apple

China ranks as Apple’s third-largest market, accounting for approximately 17% of its total revenue in the October-December quarter. 

The recent market share loss in China follows a broader trend of declining global smartphone shipments for Apple, attributed to heightened competition from Android smartphone makers led by Samsung Electronics.

Response to Market Challenges

Throughout the first quarter, Apple launched campaigns in China aimed at enticing consumers with discounts. These initiatives included subsidizing certain iPhone models by up to 1,300 yuan ($180) in an effort to stimulate demand amidst intensifying competition.

Market Reaction

In response to the market challenges and declining market share, shares of Apple slipped by 0.4% in premarket trading on Tuesday. 

The stock has experienced a decline of approximately 14% since the beginning of the year and posted its worst weekly performance in over eight months on Friday.