Apple has experienced a decline in the Chinese smartphone market, losing its position as the leading seller to local manufacturers Vivo and Huawei. This decline is reflected in Apple's annual shipments, which fell by 17%. The final quarter alone saw a significant decrease of 25% in shipments.
Analysts attribute Apple's decline to the absence of artificial intelligence capabilities in its latest iPhone models, which has diminished its competitive edge in a market where AI technologies are gaining traction. Huawei's resurgence, particularly with the launch of new phones equipped with locally-made chipsets, has posed a direct challenge to Apple's dominance. The proliferation of domestic foldable phones from brands like Xiaomi and Vivo has also intensified competition.
Despite these challenges, the overall smartphone market in China has shown resilience, with annual shipments increasing by 4% to reach 285 million units in 2024. Xiaomi, Vivo, and Oppo have emerged as standout performers, further illustrating the shifting preferences of Chinese consumers towards budget-friendly and innovative devices.
In response to declining sales, Apple has implemented rare discounts to stimulate demand. However, the company's reliance on its premium branding is being tested as domestic manufacturers continue to innovate and capture market share. The future success of Apple in China will depend on its ability to adapt to these challenges and respond to consumer demands.