Apple has been facing tough competition from domestic brands in China, leading to a decline in market share for the tech giant. In the second quarter, Apple dropped out of the top five smartphone vendors list in China, with its market share shrinking to 14%. This marks a decrease from 15% in the first quarter and 16% in the same period a year ago. The iPhone maker, once the third-largest smartphone vendor in China, has now slipped to the sixth spot with approximately 9.7 million shipments.
Chinese Brands Dominate
According to a report by Canalys, Chinese vendors now dominate all the top five positions in the smartphone market in China. This is a significant shift, signaling the success of local brands such as Huawei, Vivo, Oppo, Honor, and Xiaomi. Apple’s decline in market share can be attributed to the strategies employed by these Chinese brands for high-end products and their close collaboration with local supply chains.
Apple is currently facing a “bottleneck” in the Chinese market as it seeks to stabilize retail prices and protect the margins of its channel partners. The company needs to focus on localizing its Intelligence services in China to stay competitive in the market. Chinese brands are aggressively incorporating generative AI in their products, and Apple needs to adapt to this trend in the next 12 months.
Changing Landscape
In the second quarter, Vivo reclaimed the top spot in the Chinese market with 19% market share and 13.1 million units shipped. This success was driven by strong offline and online sales during the “618” e-commerce festival. Oppo maintained its second-place position with 11.3 million units, while Huawei spinoff Honor came in third with 10.7 million units shipped. Huawei itself secured the fourth spot with a 15% market share, showing a resurgence in its consumer business after the launch of the Mate 60 smartphone. Xiaomi rounded out the top five with solid sales of its K70 and flagship 14 series, boosted by the buzz surrounding its first electric car, the SU7.
Despite Apple’s struggles, the Chinese smartphone market grew by 10% year on year in the second quarter, with shipments exceeding 70 million units. This growth is indicative of the strong competition and innovation in the Chinese market, posing challenges for global players like Apple. As Chinese brands continue to innovate and expand their product offerings, Apple will need to adapt its strategies to regain its foothold in the competitive market.
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