Apple is no longer a top competitor in the Chinese market. Here’s how it plans to conquer its competitive position again.
Apple, the world’s biggest company by market capitalization, is quickly losing pace in its second-biggest market: China. When considering the European Union as one, China becomes Apple’s third-biggest market.
The iPhone maker’s shipments to China dropped by 6.7% in the second quarter of 2024, data from research center Canalys showed. In the April-June period, Apple shipments to China amounted to 9.7 million units, down from 10.4 million in the previous quarter.
Q1 shipments to China were themselves 25% lower than in the same period in the previous year. This shows Apple is quickly losing prominence in the Chinese market, faring against giant local competitors including Huawei, Vivo, and others.
For the first time in years, Apple fell from the top 5 smartphone sellers in China. Its market share dropped to 14% down from 16% in the previous quarter, placing it in 6th place in the Chinese market.
The Top 5 is now completely dominated by local firms, with Vivo on top at 19%. Oppo was in second place at 16%, with Huawei and Honor trailing behind at 15% each.
Huawei is set to become China’s largest smartphone maker with its recent release of the Pura 70 model, projected to sell over 10 million units in 2024. The Pura 70 mounts a Chinese-made microchip in defiance of Western sanctions trying to cut China out of the most cutting-edge semiconductors.
Apple makes its own microchips, outsourcing manufacturing to Taiwan’s TSMC.
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Future moves
“Apple faces growth pressure in the Chinese market and is actively focusing on optimizing channel management,” Lucas Zhong, research analyst at Canalys, said.
“Chinese vendors’ strategies for high-end products and their deep collaboration with local supply chains are starting to pay off in hardware and software features. Honor’s latest Magic V3, which leverages GenAI, has significantly enhanced the user experience of foldable devices.”
The Cupertino company may find renewed competitive advantage with new products currently unavailable in the Chinese market.
Speculations around Apple’s first foldable iPhone to come out in 2026 show how the company takes the Chinese market seriously. Previously, internal sources said Apple would first release a foldable iPad or Macbook to gauge the market for these kinds of products. Releasing a foldable iPhone first instead shows that Apple is aiming for a high-risk-high-reward scenario.
At the same time, Apple is waging a price war against Chinese manufacturers. The company slashed iPhone prices in China by as much as $318, trying to make its product more competitive.
Apple will release its Q2 earnings report on August 1st, which will show the true extent of its “China problem”.
