Apple's iPhone Loses Market Share in China Amid AI Feature Challenges

iPhone Is No Longer The Best-Selling Smartphone In China Amid Challenges Of Launching Apple Intelligence In The Country

Apple is best known for its innovative flagship phones and focuses on standing out, whether through its features, its distinct design, or even when naming its AI capabilities, Apple Intelligence. While the company has worked arduously in staying novel, it has drawn criticism from the tech community for its slow-paced approach to launching AI-infused features and to truly innovate. Zuckerberg has criticized the Cupertino-based tech giant time after time and, lately, on a podcast, even said the company has failed to make anything great in recent years. Now, the latest market intelligence data reveals that the iPhone is no longer the top-selling phone in China despite making sincere efforts to launch its AI features locally. Mark Zuckerberg has been sour for years for Apple's practices and has taken every opportunity to slam and share his views on how the company is performing. His latest comments at a podcast garnered quite the attention, for he not only pointed to the iPhone makers' lack of innovation but also hinted towards flat or declining sales of the smartphone. While the comment seemed to stem from rivalry, a new Canalys report reveals that the iPhone shipments in China have in fact, gone down by 25 percent YoY in the last quarter of the year. This means that the iPhone, after being crowned as the best-selling phone in China, has now gone down to the third position, with Oppo and Honor leading with a 15 percent share. In 2023, Apple was leading with a market share of 19 percent. While many owe the growing competition as one of the reasons for the downfall, Financial Times quotes the company's inability to launch Apple Intelligence features as a key factor in leading to these unfortunate circumstances. The report states: 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 has been working arduously to strike a deal with a local Chinese company to launch its Apple Intelligence features since the process in China is difficult and requires you to work with a local company to launch such capabilities. While we have been hearing about Apple striking a deal locally or being in talks with ByteDance or Tencent to use their AI models, it has not borne fruit, and the struggle seems to be there still. Since the beginning of the AI frenzy, Apple has stayed away from the ongoing wave and was one of the late adopters of the changing technology. However, when the company did finally jump on the bandwagon, the expectations were high from Apple Intelligence and how the company would not fail to impress in this domain as well. While the tech giant is facing criticism lately for its lack of innovation when it comes to Apple Intelligence features and a snail-paced approach to it, its failure to launch AI features in China has caused the company great harm, and to regain its crown, the company needs to take some radical steps to strike a deal and make its services available locally.

iPhone drops from 1st to 3rd place in China amid AI features battle

The iPhone has lost its crown as the best-selling phone in China, dropping to 3rd place in the latest market intelligence data. One factor is the company's struggle to launch Apple Intelligence features in the country after being unable to get permission to use its own generative AI model there ... Canalys reports that iPhone shipments in China fell by 25% year-on-year in the final quarter of the year. Vivo led the market for the year with a 17% market share, shipping 49.3 million units. Huawei ranked second with 46.0 million units shipped, achieving an impressive year-on-year growth of 37%. Apple, OPPO and HONOR followed in third, fourth, and fifth place respectively, each holding a 15% market share. That means Apple's market share fell from a chart-topping 19% in 2023 to joint-third with Oppo and Honor in 2024, each with a 15% share. Local brands were able to offer AI features, while Apple has yet to strike a deal to launch Apple Intelligence. The Financial Times cites this as a key factor in the change of fortunes. 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. As we've previously noted, China requires all generative AI models to have government approval in order to maintain its tight stranglehold on sources of online information within the country. Many existing western platforms are blocked by the Great Firewall of China - including Facebook, X, and Wikipedia - and Google pulled out from the country rather than give in to censorship. The government last month said that launching Apple Intelligence in China would be a "difficult and long process" unless the iPhone maker partners with a local AI company. Working with a Chinese company would instead be "simple and straightforward." Apple is said to be in talks with Tencent and ByteDance about using their AI models, but it's been reported that little progress has been made.

Apple's 2024 ended well, but AI trouble is on the horizon

New research into smartphone shipments shows Apple remains the top brand for market share worldwide, but it has slipped in China, a crucial market, and the blame likely lies in its inability to launch Apple Intelligence there. Apple will take solace in its 23% market share worldwide at the end of 2024, according to the numbers from analysts IDC, which although down from the end of 2023, is still far ahead of rival Samsung in second position with 15% market share. Recommended Videos It's a different story in China though. At the end of 2023 Apple had 19% market share of mobile shipments and topped its rivals according to research from Canalys, but at the end of 2024 Apple had fallen to third position with 15% market share. It has been overtaken by Huawei with 16% market share, and leaders Vivo with 17% market share. Please enable Javascript to view this content Apple Intelligence woes One of the reasons for Apple's downward slide in China is likely to do with Apple Intelligence. The company has been unable to release its AI-powered tools in China due to extensive regulatory requirements and stringent checks. Local brands, such as Huawei and Vivo, have released smartphones with AI features. A likely course of action for Apple to solve its problem is to forge local partnerships with AI companies, which will help it replace ChatGPT -- which is part of Apple Intelligence and not available in China -- and enable AI features in China. A report has linked Apple with Tencent, developer of the ubiquitous WeChat app, and ByteDance, the developer behind TikTok. Both have invested heavily in AI. Apple also has plans to open a new data-processing center in Shanghai, which may assist in its local AI efforts. Samsung, despite being Apple's biggest rival globally, isn't a top-five brand in China, but is apparently further ahead in its AI efforts than Apple. It has worked with technology company Baidu on its AI features, and has recently launched an AI-intensive version of its virtual assistant Bixby only in China. Samsung will launch the Galaxy S25 series in January, and Galaxy AI will certainly play a big part in the device's appeal. Apple will need to follow Samsung's lead in cementing local, and therefore already government approved, AI partners if it wants to claw back superiority in China. It will also need to continually improve and further build on Apple Intelligence globally, if it wants to stay ahead of Samsung and the incoming AI-heavy Galaxy S25.

iPhone loses global market share with Apple AI absent in China

Apple Inc. experienced a 5% decline in global iPhone sales in the final quarter of last year, primarily due to competition from Chinese manufacturers and the delayed rollout of new AI features in China. Despite this, Apple saw higher sales from its premium models and continued to perform well in other markets like Latin America.Apple Inc. sold 5% fewer iPhones globally and lost ground to Chinese rivals in the final quarter of last year, reflecting the absence of Apple Intelligence in its largest market outside the US. The iPhone slipped a point to 18% worldwide market share in 2024, according to Counterpoint Research data. Archrival Samsung Electronics Co. also gave up share to faster-growing Android device makers from China, led by Xiaomi Corp. and Vivo. Apple marked a 2% sales decline for the full year, according to the research, at a time that the wider market grew 4% globally. Cupertino, California-based Apple has been playing catchup on artificial intelligence, with its suite of AI enhancements rolling out in stages following the launch of the iPhone 16 in September. Those AI additions are not yet available in any form in China, as the company is still working to secure local partners who can help provide features like AI writing assistance and image generation. Analysts last quarter also began warning that some investors harbored overly optimistic expectations of AI features. "Apple's iPhone 16 series was met with a mixed response, partly due to a lack of availability of Apple Intelligence at launch," Counterpoint director Tarun Pathak said. "However, Apple continued to grow strongly in its non-core markets like Latin America." While it sold fewer units in China, Apple saw an increased proportion coming from its pricier Pro and Pro Max models, which accounted for more than half of all sales in the country. Lenovo Group Ltd.'s Motorola and Shenzhen-based Huawei Technologies Co. and Honor Device Co. were the fastest-growing brands in the top 10, the researchers found. China's smartphone makers are all developing their own in-house AI tools and agents, including services that can perform tasks on a user's behalf.

iPhone Loses Global Market Share With Apple Intelligence Absent in China

Apple is rolling out its AI suite in stages since September last year Apple sold fewer iPhones and lost ground to Chinese rivals last year, reflecting the absence of Apple Intelligence in its largest market outside the US. The iPhone slipped a point to 18 percent market share in 2024, according to Counterpoint Research data. Archrival Samsung Electronics also gave up share to faster-growing Android device makers from China, led by Xiaomi and Vivo. Apple marked a two percent sales decline for the full year, according to the research, at a time that the wider market grew four percent globally. Cupertino, California-based Apple has been playing catchup on Artificial Intelligence (AI), with its suite of AI enhancements rolling out in stages following the launch of the iPhone 16 in September. Those AI additions are not yet available in any form in China, the world's biggest smartphone market, as the company is still working to secure local partners who can help provide features like AI writing assistance and image generation. "Apple's iPhone 16 series was met with a mixed response, partly due to a lack of availability of Apple Intelligence at launch," Counterpoint director Tarun Pathak said. "However, Apple continued to grow strongly in its non-core markets like Latin America." Lenovo Group's Motorola and Shenzhen-based Huawei Technologies and Honor Device were the fastest-growing brands in the top 10, the researchers found. China's smartphone makers are all developing their own in-house AI tools and agents, including services that can perform tasks on a user's behalf.

Lackluster, Piecemeal Apple Intelligence Rollout Hurts iPhone Sales in Q4

Apple Intelligence failed to supercharge iPhone sales, which dipped 4.1% globally in Q4 2024. Apple and Samsung were still the top two global smartphone makers for Q4 and 2024 overall, but both saw declines and lost market share to Chinese smartphone brands Xiaomi and Vivo, according to data from IDC. Apple's Q4 shipments landed at 76.9 million for 23.2% market share, down from 80.2 million and 24.7% in Q4 2023, IDC says. Samsung saw a 2.7% drop after shipping 51.7 million phones in the quarter (its next flagship, the Galaxy S25, is expected on Jan. 22). Counterpoint Research, which looked at smartphone sales for the entire year, found that Samsung and Apple were "largely flat YoY in 2024." Apple's overall business was down 2% for the year, while Samsung eked out a modest 1% growth. Apple Intelligence was not available on the iPhone 16 lineup at launch, and when the first AI features arrived with iOS updates in October and December, they were relatively minor. As a result, "Apple's iPhone 16 series was met with a mixed response," Counterpoint says. "However, Apple continued to grow strongly in its non-core markets like Latin America, Africa, and Asia-Pacific-Others." Apple says its current AI features are just the first steps in a long-term revolution for its devices. They include AI-powered Writing Tools, a ChatGPT integration, type-to-Siri capability, notification summaries, custom-designed "Genomij," and more. While most features are useful to some degree, others have been a miss, with notification summaries being particularly divisive. Apple Intelligence is only available in English-speaking countries, including the US, Australia, Canada, Ireland, New Zealand, South Africa, and the UK. This left a gap for consumers in other countries, particularly China, where companies there -- Xiaomi, Oppo, Vivo, Honor, Huawei, Lenovo, realme, Transsion, TCL, and ZTE -- had a "remarkable" quarter, IDC says. Though its phones are not sold in the US, Xiaomi has steadily grown in recent years, gaining a percentage point of market share every year since 2022. In contrast, Samsung's share has decreased from 21% to 19%, while Apple has struggled to get above 19%, Counterpoint says. Apple plans to upgrade its AI features to support non-English languages this year, including Chinese, English (India), English (Singapore), French, German, Italian, Japanese, Korean, Portuguese, Spanish, and Vietnamese. That rollout begins with April's software update, though Apple did not confirm which languages will launch first. Some of the more transformative Apple Intelligence features are further down the line, such as the revamped Siri, reportedly slated for a 2026 launch.

iPhone's AI Limits in China Fuel 5% Sales Dip | PYMNTS.com

Apple's iPhone sales reportedly dropped 5% late last year amid stronger competition from Chinese rivals. Much of this decline can be attributed to the lack of Apple's artificial intelligence (AI) features on phones sold in China, the company's biggest market beyond the U.S., Bloomberg News reported Monday (Jan. 13). The report, citing Counterpoint Research data for the fourth quarter of 2024, said that the iPhone commanded an 18% global market share at the year's end, down one point. Bloomberg notes that Apple had been slower to launch AI offerings than its competitors, debuting its Apple Intelligence suite following the introduction of the iPhone 16 in September. And as noted here last year, experts maintain the company's embrace of the technology could change how people shop, while also pushing back against the idea that Apple has fallen behind in the AI race. "Apple may be late to the AI surge compared to Google and Amazon, which have been adding AI to products for years," The Big Phone Store CEO Steven Athwal said in an interview with PYMNTS. "But Apple has always been about timing and refinement. While others rushed to put out the latest in AI tech, Apple focused on privacy, security and user experience." One roadblock: Apple has not yet been able to add that feature to iPhone 16s sold in China. Apple has been trying to secure partnerships with Chinese companies to roll out its AI features. The country requires generative AI operators to secure government permission before they can debut a product. The Counterpoint research found that Chinese companies like Huawei were among the fast-growing brands, part of a group of firms developing their in-house AI offerings. And according to Bloomberg, some analysts have warned that investors have been too optimistic in their expectations of Apple's AI features. "Apple's iPhone 16 series was met with a mixed response, partly due to a lack of availability of Apple Intelligence at launch," Counterpoint director Tarun Pathak said. "However, Apple continued to grow strongly in its non-core markets like Latin America." Meanwhile, last week saw a report that Apple was preparing to launch 20 new products for 2025, including the latest iteration of its flagship smartphone. "The most important new product for Apple in 2025 will be the iPhone 17, but the company should also debut a new Apple Watch, new notebooks and Macs, and possibly the next version of its Vision Pro," Cash Flow Club investing group leader Jonathan Weber told Seeking Alpha. "Home accessories could be among the new launches in 2025, and depending on what they include, there is potential for positive surprises here. No matter what, growth will likely depend on rising services revenues this year as well, which has been the case for quite some time."