According to two prominent market research firms, the iPhone has dropped its position as the top-selling smartphone in China, falling from 1st to 3rd place in the last quarter of the previous year.
The surge in competition from local manufacturers is one reason cited, along with Apple’s struggle to incorporate AI features in the region.
Canalys’ report from last week
Canalys was the first to highlight Apple’s shifting status in China.
Canalys notes that iPhone shipments in China decreased by 25% year-over-year during the last quarter.
This decline resulted in Apple’s market share dropping from a leading 19% in 2023 to a tie for third place with Oppo and Honor, each holding a 15% share.
Counterpoint validates the findings
Although their figures differ slightly, Counterpoint Research has reached a similar conclusion.
Huawei claimed the top position, followed by Xiaomi and Apple. In Q4 2024, Huawei regained the lead with an 18.1% market share, marking its first time at the top since the U.S. ban.
Xiaomi secured the second position in Q4 2024 with a 17.2% market share, largely attributed to robust growth from Q3 to Q4, driven by the popularity of its flagship Mi 15 series launched in October. This year, Xiaomi has made substantial strides in premiumization.
Faced with increasing competition from Huawei and other Chinese smartphone manufacturers entering the premium sector, Apple landed in third place, capturing a 17.1% market share during the quarter.
The importance of AI features
While Chinese smartphones now incorporate AI capabilities, Apple Intelligence is not yet accessible in the country.
Apple aimed to deploy its own generative AI model in China, but the Chinese government indicated that this would not be allowed.
Last month, the government stated that introducing Apple Intelligence in China would be a “difficult and lengthy process” unless Apple collaborates with a local AI enterprise. Partnering with a Chinese company would be “more straightforward and uncomplicated.”
Apple is reportedly negotiating with Tencent and ByteDance, although there have been no visible outcomes yet.
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