In the fiercely competitive Chinese smartphone market, Apple has been pushed out of the top five vendors list in the second quarter. This decline is attributed to the growing dominance of domestic brands like Huawei in the region. Canalys, a market research firm, reported that Apple’s market share in China dropped to 14% in the second quarter, down from 15% in the previous quarter and 16% from the same period last year. As a result, Apple, which was the third-largest smartphone vendor in China last year, slipped to the sixth spot with around 9.7 million shipments.
While Apple’s shipments have been on a downward trend, Chinese vendors have been thriving due to their strategies focusing on high-end products and strong collaborations with local supply chains. For instance, Honor’s latest Magic V3, which incorporates advanced AI technology, has significantly improved user experiences with foldable devices. On the other hand, Apple is struggling in the Chinese market due to challenges in stabilizing retail prices and protecting the margins of its channel partners. Canalys also highlighted the importance of Apple localizing its Intelligence services in China to stay competitive, as Chinese brands are rapidly integrating generative AI into their products.
During the second quarter, Vivo reclaimed the top spot in the Chinese smartphone market, boasting a 19% market share with 13.1 million units shipped. This success was driven by strong sales both online and offline during the “618” e-commerce festival. Oppo maintained its second-place position with 11.3 million units shipped, thanks to the successful launch of its new Reno 12 series. Huawei spinoff Honor secured the third spot with 10.7 million units shipped, marking a 4% year-on-year increase. Huawei itself came in fourth with a 15% market share and 10.6 million shipped units, showcasing a remarkable resurgence in its consumer business after the launch of the Mate 60 smartphone. Xiaomi rounded out the top five with successful sales of its K70 and flagship 14 series, boosted by the buzz surrounding its first electric car, the SU7.
Despite Apple’s struggles, the Chinese smartphone market as a whole experienced a 10% year-on-year growth in the second quarter. Shipments exceeded 70 million units, indicating a robust demand for smartphones in the region. This growth is driven by the innovative products and competitive strategies adopted by local brands, posing a significant challenge for international players like Apple who are trying to maintain their market share in China.
Apple’s recent decline in the Chinese smartphone market underscores the fierce competition and rapidly changing dynamics in the region. To stay relevant and regain lost ground, Apple will need to adapt its strategies to align with the preferences and expectations of Chinese consumers while competing with the local giants in the industry.
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