Apple is slowly declining in market share in the smartphone sector as legal battles and competition from China mount.
Apple lost the top spot as the world’s largest smartphone maker, a report by the International Data Center (IDC) showed on Monday. The iPhone maker lost first place to the South Korean electronics firm Samsung.
The IDC report showed Apple’s market share dropping from 20.7% in 2023 to 17.3% in the first quarter of this year. Samsung boasts a 22.5% market share in Q1, up from 20.8% in Q3 last year.
Last year, Samsung became the second-largest smartphone maker after years of occupying first place. The fact that Apple gained the first spot was, therefore, a temporary exception.
In raw numbers, Apple shipped 50.1 million units in the first quarter, down from 55.4 million in the same period last year. Samsung, which recently released the new Galaxy S24 model, shipped over 60 million units in Q1.
That amounts to a 10% loss year-on-year for Apple, the steepest of any smartphone maker. The highest shipment decrease was to China, with a 2.1% decline in Q3 2023.
Apple’s shipment decline comes after the start of two major judicial battles, one from the US Department of Justice and the other from the European Commission, both concerning competition issues. These investigations will take years of legal battles, distracting Apple from its operating activities.
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Competition from China
Another issue facing Apple is the over-competition of Chinese smartphone makers. Huawei came back to bite, placing second place in China behind Xiaomi. The latter is the third-largest smartphone maker in the world with a 14.1% market share in the first quarter.
Other major smartphone makers that deteriorated Apple’s dominance in the Chinese market include Transsion, OPPO, and Vivo. China remains Apple’s third-largest market and a major source of revenue for the Cupertino company.
But Apple’s problems in China don’t stop at competition from local tech firms. The Chinese Communist Party (CCP) banned the use of iPhones for party members last year in a major blow to Apple. CCP members amount to over 98 million people, making it the world’s second-largest political party.
Investors are worried Apple may halt its growth this year, as it transitions its market outside of China. The iPhone maker is extending its operations in India, the world’s most populous nation, but it will take years before the country replaces China.
In early 2024, Apple also lost the top spot as the world’s highest-valued company to Microsoft. The latter’s meteoric growth is mostly caused by investments in artificial intelligence, a sector where Apple still lags behind.
