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Local smartphone makers Vivo and Huawei leapfrogged Apple to become the top two sellers in the Chinese market last year, dealing a blow to the iPhone maker as it struggles to introduce AI features on the mainland and fight competition from domestic players.
Apple’s China smartphone shipments slipped to 42.9mn in 2024, 17 per cent lower than the year before, according to market research firm Canalys. That cut its market share by 4 percentage points to 15 per cent. Shipments in the final quarter dropped 25 per cent year on year.
Vivo and Huawei’s shipments increased 11 per cent and 37 per cent for market shares of 17 per cent and 16 per cent respectively. The overall smartphone market grew 4 per cent on 2023, with 285mn units shipped.
The figures come as the US technology company faces growing pressure from local premium smartphone brands, particularly Huawei, which have benefited from patriotic buying and the ability to roll out artificial intelligence-powered features to their devices. The company’s Apple Intelligence service is not available on the Chinese mainland.
“Apple and its iPhone 16 series . . . faced growing competitive pressure from domestic flagship devices,” said Amber Liu, a research manager at Canalys, adding that Vivo had “shown strong momentum” by strengthening tie-ups with operators and employing effective marketing and product strategies “to solidify its position in entry-level to mid-to-high-end segments”.
Having developed its own chips in recent years, Huawei had resolved some of its earlier supply chain issues and in 2024 upgraded and refreshed its flagship phone series, adding the $2,800 trifold Mate XT, “bringing them traction and attention from high-end customers based in China”, she added.
Apple’s overall Greater China revenues fell nearly 8 per cent in its year ending in September. Chief executive Tim Cook visited China three times last year, with the company seeking to navigate the country’s complex regulatory regime and roll out the artificial intelligence features introduced with the iPhone 16.
Analysts expect a subsidy programme — unveiled this month by the National Development and Reform Commission, China’s state planner — to boost demand for smartphones. As part of the $11bn programme, China will grant subsidies of 15 per cent to people who trade-in old smartphones, tablets and other devices to buy consumer electronics worth less than Rmb6,000 ($818). The basic model iPhone 16 retails at Rmb5,999 in China, though the company has offered rare promotional discounts for its phones in recent months.
“Among the major [manufacturers], we think companies with exposure to Huawei, Honor, Oppo, Vivo and Xiaomi (by rank) are well-positioned to benefit,” HSBC analyst Frank He wrote in a note last week, noting that the structure of the subsidies meant that owners of phones worth between Rmb3,333 and Rmb6,000 stood to benefit the most. “We see a limited impact on Apple’s supply chain.”
Will Wong, an analyst at the IDC research firm, said Apple’s core challenges in 2024 were driven by its difficulties rolling out AI features, as well as weakened consumer sentiment in China, where buyers sought to save money by looking to brands offering phones for a wider range of prices.
“Consumers have changed after Covid, they are being more cautious,” he said. “The ‘fear of missing out’ sentiment is not that strong any more.”
Apple’s performance in 2025, he added, would depend on whether it could navigate China’s regulatory environment to roll out AI features with a “wow factor” and lure buyers away from innovative offerings from Chinese competitors.
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