Apple's AI struggles in China create opening for Xiaomi, Honor, and Oppo to capture market share

China's Phone Makers Smell Opportunity As Apple Stumbles On AI - Apple (NASDAQ:AAPL), Xiaomi (OTC:XIACY)

Chinese smartphone makers are actively pushing apps that let users switch from the iPhone as they race to gain market share, while Apple Inc. (NASDAQ:AAPL) struggles to roll out artificial intelligence features in the world's largest smartphone market. China's top five domestic phone brands now promote tools that simplify moving data from Apple's iOS or allow their devices to work alongside Apple products. These campaigns gained momentum as China's internet regulator delayed approval of Apple's planned AI feature rollout due to geopolitical tensions with the U.S. Also Read: China Crowds Rush Apple Stores Again After iPhone 17 Launch According to Lucas Zhong of Omdia, Chinese vendors are moving faster and more openly on AI, and their strategies are increasing competitive pressure on Apple in China, even if conversions take time, the Financial Times reported on Sunday. Fragmented Market Keeps Competition Intense China's smartphone market remains highly competitive, with no brand holding more than 20% share. Vivo led the market with an 18.5% share in the third quarter, while Apple, Honor, Oppo, Xiaomi (OTC:XIACY), and Huawei each held between 13.6% and 16.4%, according to Counterpoint Research. Domestic brands now believe AI-powered features and hardware innovations like foldables make their phones compelling alternatives to Apple. Oppo's AI assistants can track spending from screenshots and provide real-time gym guidance through the camera. Honor's devices help users find discounts, book rides faster, and create short videos. Switching Tools Designed To Ease Apple Exit Honor recently upgraded its Device Clone app to let users transfer photos, messages, and contacts from iPhones via QR code. Its Honor Connect app enables file sharing with iOS devices similar to AirDrop. Honor executive Xiangdong Li said 37% of online buyers of Honor's Magic V5 flagship switched from Apple using these tools. Xiaomi has promoted features such as file transfer, screen sharing, and notification syncing with iPhones. Oppo's latest operating system lets users handle calls, texts, and notifications from Apple devices directly on Oppo phones. Meanwhile, Apple strengthened its position in China's luxury smartphone market in October by lifting iPhone shipments and expanding its share of total sales. The Chinese smartphone market grew 8% year over year, with Apple leading the momentum alongside domestic brands. iPhone 17 Demand Drives Shipment Surge Apple captured roughly one in every four smartphone sales, while iPhone shipments jumped 37% on strong demand for the iPhone 17 lineup. All three iPhone 17 models delivered mid-to-high double-digit growth, led by the base version, and new models made up more than 80% of Apple's unit sales, according to Counterpoint analyst Ivan Lam. Rising average selling prices are also positioning Apple for a potential record December quarter. Xiaomi, Oppo Gain Ground As Huawei Lags Xiaomi climbed to the No. 2 spot for the first time in more than a decade, supported by the early launch of the Xiaomi 17 series and a broad product lineup. OPPO drove domestic brand growth through strong demand for its Find X9 and Reno 14 models. Despite Huawei's Mate 80 launch in late November, Apple continues to show strong momentum. Apple's share of one in every four smartphone sales matches its previous peak reached in 2022, even as Chinese brands steadily expand their market presence. AAPL Price Action: Apple shares were down 0.18% at $278.27 during premarket trading on Monday. The stock is approaching its 52-week high of $288.62, according to Benzinga Pro data. Read Next: Amazon Doubles Down On AI With New Self-Running Agents And Custom-Built Chips Photo by fireFX via Shutterstock AAPLApple Inc$278.32-0.17%OverviewXIACYXiaomi Corp$27.600.99%Market News and Data brought to you by Benzinga APIs

Apple's AI Troubles Open Opportunities for China's Smartphone Sector | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. That's according to a report Sunday (Dec. 7) by the Financial Times (FT), which characterizes this as a bid by these companies to capture market share as Apple struggles to debut artificial intelligence (AI) offerings in this massive smartphone market. The report said the five biggest phone companies have all promoted programs this year to help consumers migrate from Apple's operating system or to use Chinese phones alongside devices from Apple. The FT added that these efforts are happening as China's internet regulator has held off on approving new AI features from Apple following geopolitical tensions with the U.S. Apple in September reportedly delayed the introduction of its new, thinner smartphone, iPhone Air, in China out of a need for regulatory approval. "Chinese smartphone vendors are clearly moving faster and with greater openness in AI development," said Lucas Zhong, an analyst for the consultancy Omdia. "While it may take time for these strategies to deliver meaningful conversions, they will undoubtedly add pressure to Apple's operations in China." The report added that smartphone providers in China have had trouble wooing Apple users because the American company makes it simple to transfer apps and files to new devices. Now, however, these companies believe their new AI-powered features, along with things like foldable phones, have made their products enticing enough to attract Apple fans. For example, the latest model of phone from China's Honor can help shoppers find discounts by comparing a range of coupon sites, book taxis faster by coordinating between different ride-hailing apps and generate short videos. "Apple is a truly great company, and it's one our entire industry should learn from, benchmark against and even surpass," Xiangdong Li, AI product director for Honor's Magic operating system, told the FT. "If Apple moves slowly, that presents a great opportunity for us, right?" Meanwhile, a report last month from global market research firm Counterpoint said that Apple was on pace to overtake Samsung as the world's largest smartphone seller, and hang onto that title through 2029. "Beyond the highly positive market reception for the iPhone 17 series, the key driver behind the upgraded shipment outlook lies in the replacement cycle reaching its inflection point," Counterpoint Senior Analyst Yang Wang said in a news release. "Consumers who purchased smartphones during the COVID-19 boom are now entering their upgrade phase."