Apple’s position in China’s competitive smartphone market faced a significant blow in 2024, as local brands Vivo and Huawei surpassed the iPhone maker in market share. Data from research firm Canalys revealed a 17% decline in Apple’s annual shipments, marking its largest-ever sales contraction in China, with all four quarters seeing negative growth. The decline signals a broader shift in consumer preferences and highlights the growing dominance of domestic brands in one of the world’s largest smartphone markets.
The Rise of Vivo and Huawei
Vivo emerged as the market leader in China for 2024, capturing 17% of the market share. Huawei followed closely with 16%, pushing Apple to third place with a 15% share. Vivo’s success was largely driven by its budget-friendly models, while Huawei made a strong comeback in the premium segment, boosted by its new flagship devices powered by locally-made chipsets. Huawei’s shipments rose by 24% in the fourth quarter alone, demonstrating its growing appeal among Chinese consumers.
Apple’s struggles, on the other hand, were exacerbated by a 25% decline in shipments during the final quarter of 2024. This marked a stark contrast to Huawei’s resurgence and the continued growth of Vivo, Oppo, and Xiaomi.
Innovation as a Key Differentiator
One of the key factors behind Apple’s decline is the competitive edge of domestic brands in innovation. Canalys analyst Toby Zhu highlighted several challenges facing Apple, including Huawei’s flagship releases and the proliferation of foldable phones in the high-price segment, a category where Chinese manufacturers have excelled.
Additionally, Android-based brands such as Xiaomi and Vivo have leveraged technological advancements to build strong consumer loyalty. Xiaomi posted the strongest growth among the top five vendors, with a 29% increase in shipments during the fourth quarter. Oppo and Vivo also recorded significant gains of 18% and 14%, respectively, further underscoring the growing influence of domestic players.
Apple, meanwhile, has faced criticism for the lack of artificial intelligence capabilities in its latest iPhones. In a market where cutting-edge features like AI integration and foldable displays are gaining traction, Apple’s offerings appear increasingly outdated.
Pricing Strategies to Regain Momentum
In response to declining sales, Apple resorted to rare promotional discounts to stimulate demand. From January 4 to 7, the company offered price cuts of up to 500 yuan ($68.50) on its iPhone 16 models through official channels. Major e-commerce platforms such as Alibaba’s Tmall marketplace joined the effort, offering discounts of up to 1,000 yuan ($137). While these promotions aim to boost short-term sales, they reflect the mounting pressure Apple faces in retaining its market position.
The Bigger Picture
China’s smartphone market grew by 4% year-on-year in 2024, with annual shipments reaching 285 million units. However, the landscape has shifted dramatically, with domestic brands solidifying their dominance. Huawei’s comeback, in particular, has reshaped the competitive dynamics, signaling that Apple can no longer rely on its premium status alone to maintain its foothold.
Apple’s struggles in China highlight a critical need to adapt to evolving consumer preferences and technological trends. With domestic brands like Vivo, Huawei, and Xiaomi innovating rapidly and capturing market share, Apple faces an uphill battle to reclaim its position in this vital market. The rise of local competitors underscores a broader transformation in China’s smartphone industry, where innovation and affordability increasingly dictate success.
(Source:www.reuters.com)
The Rise of Vivo and Huawei
Vivo emerged as the market leader in China for 2024, capturing 17% of the market share. Huawei followed closely with 16%, pushing Apple to third place with a 15% share. Vivo’s success was largely driven by its budget-friendly models, while Huawei made a strong comeback in the premium segment, boosted by its new flagship devices powered by locally-made chipsets. Huawei’s shipments rose by 24% in the fourth quarter alone, demonstrating its growing appeal among Chinese consumers.
Apple’s struggles, on the other hand, were exacerbated by a 25% decline in shipments during the final quarter of 2024. This marked a stark contrast to Huawei’s resurgence and the continued growth of Vivo, Oppo, and Xiaomi.
Innovation as a Key Differentiator
One of the key factors behind Apple’s decline is the competitive edge of domestic brands in innovation. Canalys analyst Toby Zhu highlighted several challenges facing Apple, including Huawei’s flagship releases and the proliferation of foldable phones in the high-price segment, a category where Chinese manufacturers have excelled.
Additionally, Android-based brands such as Xiaomi and Vivo have leveraged technological advancements to build strong consumer loyalty. Xiaomi posted the strongest growth among the top five vendors, with a 29% increase in shipments during the fourth quarter. Oppo and Vivo also recorded significant gains of 18% and 14%, respectively, further underscoring the growing influence of domestic players.
Apple, meanwhile, has faced criticism for the lack of artificial intelligence capabilities in its latest iPhones. In a market where cutting-edge features like AI integration and foldable displays are gaining traction, Apple’s offerings appear increasingly outdated.
Pricing Strategies to Regain Momentum
In response to declining sales, Apple resorted to rare promotional discounts to stimulate demand. From January 4 to 7, the company offered price cuts of up to 500 yuan ($68.50) on its iPhone 16 models through official channels. Major e-commerce platforms such as Alibaba’s Tmall marketplace joined the effort, offering discounts of up to 1,000 yuan ($137). While these promotions aim to boost short-term sales, they reflect the mounting pressure Apple faces in retaining its market position.
The Bigger Picture
China’s smartphone market grew by 4% year-on-year in 2024, with annual shipments reaching 285 million units. However, the landscape has shifted dramatically, with domestic brands solidifying their dominance. Huawei’s comeback, in particular, has reshaped the competitive dynamics, signaling that Apple can no longer rely on its premium status alone to maintain its foothold.
Apple’s struggles in China highlight a critical need to adapt to evolving consumer preferences and technological trends. With domestic brands like Vivo, Huawei, and Xiaomi innovating rapidly and capturing market share, Apple faces an uphill battle to reclaim its position in this vital market. The rise of local competitors underscores a broader transformation in China’s smartphone industry, where innovation and affordability increasingly dictate success.
(Source:www.reuters.com)