Apple iPhone Sales Plummet in China: Huawei's Resurgence Deals Major Blow to Market Share

Apple iPhone Sales Plummet in China: Huawei's Resurgence Deals Major Blow to Market ShareAccording to Counterpoint Research, Apple iPhone sales in China experienced a significant 18.2% year-over-year decline in Q4 2024, far exceeding the overall 3

Apple iPhone Sales Plummet in China: Huawei's Resurgence Deals Major Blow to Market Share

According to Counterpoint Research, Apple iPhone sales in China experienced a significant 18.2% year-over-year decline in Q4 2024, far exceeding the overall 3.2% drop in the Chinese smartphone market. This resulted in Apple dropping from the top spot in Q4 2023 to third place, behind Huawei and Xiaomi, with its market share shrinking to approximately one-sixth. Simultaneously, global iPhone sales were also impacted, declining 5% year-over-year, with global market share dropping by 1 percentage point to 19%.

This dramatic performance slump stems primarily from two factors: underperforming iPhone 16 sales and intense competition from domestic Chinese brands.

iPhone 16: Strong Start, Weak Finish Missing AI Features a Fatal Flaw

While the iPhone 16 series initially showed strong momentum, with a 20% year-over-year sales increase in the first three weeks, this growth proved unsustainable. Chinese consumer enthusiasm cooled rapidly, likely due to the significant absence of many advertised AI features in the Chinese market.

Apple touted AI upgrades as a major selling point for the iPhone 16, yet numerous new features remained unavailable in China. To address this, Apple is actively seeking partnerships with domestic Chinese firms like Baidu and Tencent to resolve AI infrastructure issues on both the device and cloud side. However, these negotiations have yet to yield agreements, directly impacting the iPhone 16's long-term prospects in China. This functional deficiency not only dampened consumer interest but also cost Apple the opportunity to lead in AI applications, paving the way for its market share loss.

Huawei's Strong Comeback Intensifies Domestic Brand Competition

Beyond the iPhone 16's shortcomings, the rise of domestic Chinese brands put immense pressure on Apple. Counterpoint Research highlights the launch of Huawei's Mate 70 series as a key step in reclaiming its leadership position in the Chinese high-end market. Featuring the latest HarmonyOS NEXT operating system and domestically produced chips, the Mate 70 series, released in November, effectively boosted Huawei's market share. Counterpoint analyst Zhang Mengmeng stated, "This is the first time Huawei has regained its leadership position since the US ban." The strong performance of both Huawei's mid-range Nova 13 series and high-end Mate 70 series resulted in a 15.5% year-over-year sales increase, directly impacting Apple's position in the Chinese high-end smartphone market.

Meanwhile, the Xiaomi 15 series also enjoyed strong demand, and the success of its electric vehicle business enhanced its brand image, further solidifying its competitiveness in the smartphone market. These domestic brands challenge Apple not only in terms of product performance and pricing but also in brand influence and market recognition. Their success reflects the growing acceptance and trust Chinese consumers have in domestic brands.

Overall Weakness in the Chinese Smartphone Market and Cautious Consumer Spending

It's important to note that the iPhone's decline in China is also linked to the overall downturn in the Chinese smartphone market. Ethan Qi, Vice President of Counterpoint Research Greater China, stated that Q4 2024 was the only quarter in 2024 to show a year-over-year decline (3.2%) in the Chinese smartphone market, indicating more cautious consumer spending. Against this backdrop of a weakening market, the significant drop in iPhone sales highlights the challenges Apple faces in China. This reflects not only Apple's own issues but also the impact of the Chinese macroeconomic environment and consumer confidence on the tech consumer market.

2025 Outlook: Cautiously Optimistic, Market Recovery Takes Time

Looking ahead to 2025, Counterpoint Research maintains a cautiously optimistic outlook for the Chinese smartphone market, projecting a 1%-5% year-over-year growth in overall sales. This suggests hope for recovery, but a return to strong growth will take time. For Apple, regaining growth momentum requires addressing product issues, closely monitoring market shifts, and adapting to Chinese consumer needs. This includes improving product features, strengthening partnerships with domestic manufacturers, and enhancing brand image. Apple's ability to overcome these challenges will largely determine its future in the Chinese market. Currently, the challenges are significant, Apple's dominance is severely threatened, and the path forward is uncertain.

Apple's setback in the Chinese market reflects not only its internal challenges but also a profound shift in the competitive landscape of the Chinese smartphone market. Huawei's resurgence and continued efforts from domestic brands like Xiaomi pose unprecedented challenges for Apple in China. Adapting and succeeding in this new market environment is a critical issue Apple must address. This significant drop in Apple sales also signals an increasingly intense and unpredictable future for the Chinese smartphone market.