China's Smartphone Market Rebounds in 2024: Vivo Takes the Lead, Huawei Shows Strong Growth, Apple Faces Challenges

China's Smartphone Market Rebounds in 2024: Vivo Takes the Lead, Huawei Shows Strong Growth, Apple Faces ChallengesAfter two years of decline, China's smartphone market experienced a resurgence in 2024. Canalys data reveals that the mainland China smartphone market shipped 285 million units in 2024, a 4% year-on-year increase

China's Smartphone Market Rebounds in 2024: Vivo Takes the Lead, Huawei Shows Strong Growth, Apple Faces Challenges

After two years of decline, China's smartphone market experienced a resurgence in 2024. Canalys data reveals that the mainland China smartphone market shipped 285 million units in 2024, a 4% year-on-year increase. The fourth quarter saw intense competition, with manufacturers reporting their results and a significant shift in market share.

Q4 Market Share: Apple Takes the Crown, Vivo Close Behind

According to Canalys, Apple secured the top spot in the Chinese smartphone market in Q4 2024, shipping 13.1 million units. Vivo and Huawei followed with 17% and 16% market share respectively. Xiaomi ranked fourth with 12.2 million units shipped, a remarkable 29% year-on-year growth. OPPO came in fifth with 10.6 million units shipped, showing an 18% year-on-year increase. Honor fell out of the top five. Analysts attribute this growth to the cost-effective offerings from manufacturers like Honor, OPPO, and Vivo, coupled with innovations in the high-end market such as generative AI, self-developed systems and chips, and foldable screens, stimulating upgrades and driving healthy structural market growth.

Full-Year Performance: Vivo Dominates, Huawei's Growth Surges

Canalys' full-year data shows a 5% year-on-year increase in total shipments, reaching 77.4 million units, driven by factors including a strong high-end market season, government subsidies, and year-end promotions. Vivo secured the top spot in terms of total shipments for 2024 due to its comprehensive market strategy, followed by Huawei. Apple, OPPO, and Honor held the third, fourth, and fifth positions respectively, each with 15% market share.

It's noteworthy that Honor, which held 16%, 15%, and 15% market share in the first three quarters of 2024, dropped out of the top five in Q4, with a market share below 14%. Xiaomi replaced Honor as the fourth-largest player in Q4. Xiaomi's financial report revealed a 2.5% year-on-year increase in smartphone sales costs to 41.9 billion yuan in Q3 2024, primarily due to increased sales and rising core component prices. Xiaomi Group President Lu Weibing attributed the decline in Q3 smartphone gross margin to factors including peak memory prices and product launch timing. He also noted that supply chain price fluctuations are in line with market trends, with memory and screen prices rising since Q3 of the previous year and expected to slightly decline in Q4.

Canalys Research Manager Liu Yixuan stated that intense competition led to dynamic market changes, with manufacturers actively investing in their strengths. Vivo solidified its position in the entry-level to mid-to-high-end segments through its strong online and offline channels, carrier partnerships, marketing efforts, and product strategy. She also pointed out that Xiaomi gradually restored its shipment rhythm in 2024, with its digital series building strong user reputation and channel confidence. The success of its EV products and ecosystem products, particularly the synergistic innovation in home appliances, fueled its shipment performance, resulting in four consecutive quarters of share growth.

Apple's Downward Trend, Huawei's Continued High Growth

In 2024, Apple experienced a 17% year-on-year decline in shipments, the largest drop among the top five brands. Despite securing the top spot in Q4's peak sales season, its year-on-year decline still reached 25%. To combat this, Apple implemented several price cuts throughout 2024, even offering subsidies on the iPhone 16 series in early 2025, with some online flagship stores offering discounts exceeding 1,000 yuan.

TF International Securities analyst Ming-Chi Kuo believes Apple may face even tougher challenges in 2025 and needs to cautiously address the potential downside risks from previous market over-optimism. He predicts iPhone shipments between 220 and 225 million units in 2025, below market consensus expectations (240 million or more). He also stated that Apple is cautious in discussions with key suppliers about 2025 iPhone production plans, expecting a year-on-year decline of around 6% in H1 2025 iPhone shipments. Furthermore, he suggests that the planned ultra-thin iPhone and foldable iPhone, which would forgo physical SIM cards for a thinner design, could hinder shipments in China. In Apple's previous earnings call, Cook stated that the impact of Apple Intelligence on iPhone upgrade demand remains uncertain.

Canalys Senior Analyst Zhu Jiatao believes that while Apple's price cuts had some impact on sales, the effect was limited, especially considering future government subsidies for models priced under 6,000 yuan, which would exclude Apple's pricing. He also highlighted generative AI as a key driver of high-end user upgrades.

In stark contrast to Apple, Huawei not only achieved a 16% market share in Q4 but maintained high growth for three consecutive quarters, becoming the fastest-growing brand. In Q1-Q4 2024, Huawei's market share in mainland China was 17%, 15%, 16%, and 17% respectively, with year-on-year growth rates of 70%, 41%, 24%, and 24%. The successful pre-orders of the Mate 60 Pro, setting multiple historical records for Huawei phones, directly boosted its market share in China. Huawei Consumer BG Chairman Yu Chengdong stated in his first employee letter of the new year that despite severe supply shortages, Huawei phones regained the top spot in the Chinese market, with Pura70 series sales exceeding 10 million, demonstrating strong market competitiveness and brand resilience.

Zhu Jiatao noted that the production and supply shortage issues for the Mate 60 series gradually improved in Q1 of last year, becoming an important factor in driving Huawei's overall growth. Furthermore, the nova 12 series, launched in December with HarmonyOS 4.0 and supporting two-way satellite communication, further expanded the application of Kirin chips and successfully boosted performance in the mid-range segment. He added that in the high-end market, technological innovations such as generative AI, self-developed and restructured systems (like Huawei's HarmonyOS and self-developed chips), and revolutionary foldable screen designs continued to stimulate high-end user upgrades.

In conclusion, China's smartphone market showed signs of recovery in 2024, but competition remained fierce. Vivo secured the top spot with its comprehensive market and product strategies, followed by Huawei's strong growth. Apple faced significant challenges from domestic manufacturers and needs a more proactive strategy to adapt to market changes. The future market trend requires continued monitoring.