The iPhone has fallen from its position as the top-selling smartphone in China, now ranking in 3rd place according to the latest market intelligence reports.
A contributing factor is Apple’s difficulties in launching Apple Intelligence features in the country, as they have not secured permission to deploy their generative AI model there.
According to Canalys, iPhone shipments in China plummeted by 25% year-on-year during the last quarter.
Leading the market for the year was Vivo with a 17% market share, shipping 49.3 million units. Coming in second was Huawei, with 46.0 million units shipped and a remarkable year-on-year growth of 37%. Apple, OPPO, and HONOR held the third, fourth, and fifth positions, respectively, each with a 15% market share.
This shift means Apple’s market share has decreased from a commanding 19% in 2023 to a tie for third place with Oppo and Honor in 2024, each claiming a 15% share.
Local brands have been able to introduce AI features, while Apple has yet to finalize a deal to launch Apple Intelligence. The Financial Times highlights this as a significant factor in the change of market dynamics.
The data emerges as the US technology giant faces increasing competition from local premium smartphone manufacturers, notably Huawei, which have gained from patriotic consumer behavior and the capacity to implement AI-enhanced features in their devices. Apple Intelligence is not accessible on the Chinese mainland.
As noted previously, China mandates that all generative AI models receive government approval to maintain stringent control over online information sources in the country. Numerous Western platforms, including Facebook, X, and Wikipedia, are blocked by the Great Firewall of China, and Google exited the market instead of complying with censorship requirements.
The government indicated last month that launching Apple Intelligence in China would be a “difficult and lengthy process” unless the iPhone manufacturer collaborates with a local AI firm. Partnering with a Chinese company would be “simple and straightforward.”
Reports suggest that Apple is in discussions with Tencent and ByteDance to utilize their AI models, but progress has reportedly been minimal.
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