Apple's iPhone Loses Ground in China as Local Brands Surge Ahead

Apple Drops To Sixth Position In China's Smartphone Shipments, As The iPhone Faces Immense Competition From Huawei, Vivo, More

Apple is not doing so well in China, and based on the latest numbers from a research firm, the company has dropped below the fifth position in the region for the first time in many years. The second quarter results suggest that Apple is now the sixth largest smartphone vendor in China, competing against Chinese brands like Huawei, Oppo, Vivo, and more. China is one of the biggest markets for Apple, and it has continued to offer promotions and discounts for the iPhone, but to no avail, as the company's market share dropped from 16 percent to 14 percent, reports Canalys. The company's smartphone shipments in the region dropped by at least 6.7 percent year-over-year, and there could be many reasons for this. For one, competition in the region has gradually increased, and the lack of innovation in design could also have contributed to the downfall. Specifically, Huawei has emerged as one of the leading brands in the region, and the company's Kirin-based processors are gradually getting better than Apple's A-series chips. According to the research firm, the total smartphone shipments in China increased by 10 percent compared to last year in the second quarter, with up to 70 million units shipped. Vivo claimed the top spot with 13.1 million units, catering to 19 percent of its market share, while Oppo secured 11.3 million units during the same time period and took the second spot. Honor took the third spot with 10.7 million units, and Huawei, which has improved a lot in recent years, took the fourth spot with 10.6 million units. Xiaomi upped its game and bagged 10 million units, entering the top five position, but Apple failed to make the cut as it only managed to gather 9.7 million units of the iPhone in China. With fierce competition among Android smartphone manufacturers in China, Apple faces immense pressure and has dropped below the top five rankings as a result. As mentioned, Apple has been promoting the iPhone with a series of discounts and offers, but it still was not able to secure a position in the top five. However, Apple's numbers could have been even lower than they are now if it had not been for the promotions. It can be concluded that the region has fierce competition in the Chinese market, unlike the North American market, which is Apple's stronghold. With the growth of local companies in the region, it would be even hard for Apple to come back to the top five rankings, and Apple Intelligence could change it. However, Apple's AI features will only be available on the U.S. English language initially, which means that its demand in China will be limited until Apple updates the language. We will keep you posted on the latest, so be sure to share you opinions in the comments below.

Apple's iPhone Drops Out of China Top Five as Local Rivals Soar

(Bloomberg) -- Apple Inc. lost ground in China's smartphone market in the June quarter after local companies like Huawei Technologies Co. surged ahead. IPhone shipments there slid 3.1% during the period, compared with an 11% year-on-year rise among Android-powered competitors, according to market tracker IDC. That squeezed Apple out of the top five handset makers in the country for the first time in four years. The closely watched iPhone, central to Apple's consumer electronics empire, has struggled to sustain its usual popularity in China this year, with retailers and Apple itself resorting to deep discounts. The country's troubled economy has contributed to a slowdown in sales, while domestic champion Huawei led a resurgence in Android alternatives. Market research firm Canalys reported a 3.9% decline in iPhone China shipments in the period. Just months ago, Apple seemed on a path to recovery when Beijing government data showed a surge of more than 40% in April and May. But shipments dropped last month due to profitability concerns among its local partners, according to IDC. There's also a discrepancy between what the government and research firms like IDC report. The national statistics track the number of smartphones registered with the government before getting shipped to retail stores. IDC looks at the actual deliveries to retail partners, which is more closely correlated with sales. "We did see a YoY growth in the April-to-May shipments, particularly April, to prepare for the 618 shopping festival," said IDC analyst Will Wong. "Nevertheless, the offline channel partners, which were more reluctant to burn marketing money, slowed down the pace in the last month of 2Q24 to ensure profitability." Still, assessing iPhone shipments is a difficult task -- particularly in China's more volatile post-Covid environment. In May, Chief Executive Officer Tim Cook surprised many analysts when he said iPhone revenue in the country grew during the March quarter, despite widespread estimates that shipments had fallen. In the latest quarter, the resurgence of Huawei, whose shipments improved by 50%, and the bruising contest among local players like Vivo and Xiaomi Corp. pushed Apple into sixth place in the market, according to IDC. It came in a quarter when iPhone shipments globally stabilized. Apple reports its earnings for the period on Aug. 1. Globally, the company aims to ship at least 90 million iPhone 16 devices in the latter half of this year, counting on AI services to fuel demand for its new lineup after a rocky 2023. The company told suppliers and partners that it's targeting about 10% growth in shipments of new iPhones compared with their predecessors. "The company is in much better position today in China than it was back in 2020, with a significantly higher share - 13.6% now vs. 8.3% in 2020 Q3 -- and almost 40% higher shipment volume," said IDC analyst Nabila Popal.

Apple's no longer among top 5 smartphone vendors in China as domestic brands dominate market

Customers are shopping for the iPhone 15 at the flagship store of Apple Smart Products on Nanjing Road Pedestrian Street in Shanghai, China, on May 24, 2024. Apple was edged out of the top five smartphone vendors' list in China in the second quarter, as competition from domestic brands such as Huawei intensifies, according to a Canalys report. Apple's market share in China shrank to 14% in the second quarter, the report released Thursday showed, from 15% in the first quarter and 16% in the same period a year ago. The iPhone maker, which was the third-largest smartphone vendor in the second quarter last year, dropped to the sixth spot with about 9.7 million in shipments, according to CNBC calculations. "It is the first quarter in history that domestic vendors dominate all the top five positions," said Lucas Zhong, research analyst at Canalys. Apple's shipments have been declining since the first quarter when they dropped 25% year on year to 10 million units. "Chinese vendors' strategies for high-end products and their deep collaboration with local supply chains are starting to pay off in hardware and software features. Honor's latest Magic V3, which leverages GenAI, has significantly enhanced the user experience of foldable devices," Zhong added. On the other hand, Apple is facing a "bottleneck" in the Chinese market as it aims to "stabilize retail prices and protect margins of channel partners," he said. Localization of Apple Intelligence services in China will be an important move in the next 12 months, Canalys said, as Chinese brands are aggressively incorporating generative AI into their products.

iPhone elbowed out of top 5 in China by domestic smartphone rivals

Apple dropped out of the top five smartphone sellers in China for the first time in four years in the second quarter, with the iPhone losing ground to models from domestic handset makers including Huawei. While China's smartphone shipments grew 8.9 per cent year over year to 71.6mn units -- a third consecutive quarter of growth as the market recovers from a slump -- Apple saw a 3.1 per cent decline, according to the International Data Corporation research group, citing preliminary data. But Apple still has a larger overall market share in China than it did in 2020, at 13.6 per cent today compared with 8.3 per cent in the third quarter of that year, IDC noted. Data published by rival research group Canalys also found local companies now make up the top five sellers in China. Xiaomi entered the top five as Apple's market share fell by 2 percentage points, despite its discounting of iPhone models during the quarter. Canalys said Xiaomi's smartphone sales benefited from marketing buzz around the launch of its first electric car, the SU7. Vivo, Oppo and Honor are the other Chinese brands in the top five. Concerns about intensifying competition and a government crackdown on iPhones in China have been a persistent issue for Apple in recent months, offsetting positive signs such as sustained double-digit growth in its services business, which includes the App Store, Apple Pay and Apple TV+. Huawei launched its flagship Mate 60 smartphone series in September last year. "This year the slump of Apple [in the first half of 2024] goes beyond just seasonality but is directly a result of increased competition from Huawei, the only other major player in the premium segment outside of Apple," IDC research director Nabila Popal told the Financial Times. But Apple's year-on-year decline in China has "slightly improved" compared with the first quarter, according to the research. "Huawei's threat may lose steam if they don't introduce AI features soon -- as these are expected to become staple elements of premium devices," Popal added. Apple will report earnings for the quarter to the end of June next Thursday, with investors watching for signs of a surge in global iPhone sales. Chief executive Tim Cook has been increasingly bullish in public about the potential for artificial intelligence to boost sales into 2025. Bank of America analysts this month reiterated their "buy" rating on Apple, saying they expected a strong multiyear refresh cycle for the iPhone driven by a large base of users working with older models who will be drawn in by new AI features. Apple unveiled "Apple Intelligence" at its annual developer conference in June. The suite of AI features will power a more intelligent Siri assistant and offer new tools such as photo editing features, custom emoji generation and writing aids. A partnership with OpenAI will also give Apple users free access to ChatGPT, allowing them to take advantage of its larger AI models. The new iPhone 16 is expected to be announced in September. After a bumpy start, Apple shares are up 17 per cent since the beginning of 2024, and the company has reclaimed its position as the most valuable US-listed company from Microsoft and Nvidia.

Apple's iPhone loses ground in China as Huawei and local brands surge ahead

Apple Inc. lost ground in China's smartphone market in the June quarter after local companies like Huawei Technologies Co. surged ahead. IPhone shipments there slid 3.1% during the period, compared with an 11% year-on-year rise among Android-powered competitors, according to market tracker IDC. That squeezed Apple out of the top five handset makers in the country for the first time in four years. The closely watched iPhone, central to Apple's consumer electronics empire, has struggled to sustain its usual popularity in China this year, with retailers and Apple itself resorting to deep discounts. The country's troubled economy has contributed to a slowdown in sales, while domestic champion Huawei led a resurgence in Android alternatives. Market research firm Canalys reported a 3.9% decline in iPhone China shipments in the period. Counterpoint Research, which tracks sales to end users, saw a 5.7% drop for the iPhone. Just months ago, Apple seemed on a path to recovery when Beijing government data showed a surge of more than 40% in April and May. But shipments dropped last month due to profitability concerns among its local partners, according to IDC. There's also a discrepancy between what the government and research firms like IDC report. The national statistics track the number of smartphones registered with the government before getting shipped to retail stores. IDC looks at the actual deliveries to retail partners, which is more closely correlated with sales. "We did see a YoY growth in the April-to-May shipments, particularly April, to prepare for the 618 shopping festival," said IDC analyst Will Wong. "Nevertheless, the offline channel partners, which were more reluctant to burn marketing money, slowed down the pace in the last month of 2Q24 to ensure profitability." Still, assessing iPhone shipments is a difficult task -- particularly in China's more volatile post-Covid environment. In May, Chief Executive Officer Tim Cook surprised many analysts when he said iPhone revenue in the country grew during the March quarter, despite widespread estimates that shipments had fallen. In the latest quarter, the resurgence of Huawei, whose shipments improved by 50%, and the bruising contest among local players like Vivo and Xiaomi Corp. pushed Apple into sixth place in the market, according to IDC. It came in a quarter when iPhone shipments globally stabilized. Apple reports its earnings for the period on Aug. 1. Globally, the company aims to ship at least 90 million iPhone 16 devices in the latter half of this year, counting on AI services to fuel demand for its new lineup after a rocky 2023. The company told suppliers and partners that it's targeting about 10% growth in shipments of new iPhones compared with their predecessors. "The company is in much better position today in China than it was back in 2020, with a significantly higher share - 13.6% now vs. 8.3% in 2020 Q3 -- and almost 40% higher shipment volume," said IDC analyst Nabila Popal.

Apple drops out of China's top 5 smartphone brands - VnExpress International

The American brand ranked sixth with a 14% market share in mainland China, down 2 percentage points year-on-year, according to data from Singapore-headquartered market research company Canalys. Vivo claimed the top spot with a 19% share, followed by Oppo, Honor, Huawei and Xiaomi, which overtook Apple. "It is the first quarter in history that domestic vendors dominate all the top five positions," said Canalys research analyst Lucas Zhong. "Chinese vendors' strategies for high-end products and their deep collaboration with local supply chains are starting to pay off in hardware and software features". Zhong added that the race ahead will depend on the adoption of AI technologies in smartphones. Local brands Huawei, Honor, Oppo, and Vivo are leading the way by incorporating technologies such as GenAI into their products and services, he said. The localization of Apple's Intelligence services in mainland China therefore will be crucial in the next 12 months, he added. Mainland China's smartphone market grew 10% year-on-year to 70 million units in the second quarter, Canalys data shows. "The Chinese market is finally aligning with global recovery speeds, largely driven by the supply side, said Canalys research manager Amber Liu. Smartphone vendors offered many discounts and promotions since the beginning of the year to boost sales, she added.

iPhone market share declines in China, but two things could reverse the trend

Apple's iPhone market in China continues to be a struggle, according to a new research report. The company has lost market share and fallen out of the top five vendors. But there are two things analysts believe could reverse the trend and lead to fresh success for Apple: AI and foldables. Apple's story in China this year is complicated. On one hand, the company has seen some sales improvements in recent months. As reported in the last quarterly earnings, iPhone sales were trending up. However, according to a new research report from Canalys, Apple is lagging behind its competition significantly. In Q2 2024, the smartphone market in Mainland China grew 10% year-over-year. Although iPhone sales benefited from the 618 shopping festival, it was outpaced by Chinese rivals. Apple slipped out of the top five smartphone vendors in the quarter to take sixth place, and its market share declined by 2% to 14%. The report explains: "It is the first quarter in history that domestic vendors dominate all the top five positions," added Canalys Research Analyst Lucas Zhong. "Chinese vendors' strategies for high-end products and their deep collaboration with local supply chains are starting to pay off in hardware and software features. HONOR's latest Magic V3, which leverages GenAI, has significantly enhanced the user experience of foldable devices. There are two key components identified in this quote that are hurting Apple: AI and foldables. But these also represent the iPhone's greatest opportunities for growth. The localization of Apple's Intelligence services in mainland China will be crucial in the next 12 months Apple says additional languages and territories are coming in the year ahead. Expect to see China prioritized in those localization efforts. Chinese companies are experiencing such a boom of smartphone sales, according to Canalys, in large part because of their AI innovations. Apple will want to join that boom as soon as it possibly can. Recent reporting indicates the long-rumored foldable iPhone is finally getting real. The device is expected to launch in 2026. Reporting on the foldable iPhone has highlighted the proliferation of foldable smartphones in China. Foldables, like AI, is a key market that Apple seems required to enter. If it doesn't, the company can expect to see its solid market share continue to slip over time.