Apple's iPhone Sales Growth in China: Buy, Sell, or Hold Stock?

Apple's iPhone sales in China grew 8% YoY in Q2 2025, breaking a two-year streak of declining sales. Strong demand for the iPhone 16 Pro and Pro Max models drove the growth, fueled by aggressive price cuts and a national subsidy program. The rebound is expected to extend into the fiscal year, with China remaining a critical source of revenue. AAPL stock has gained 16% over the past three months, and trades at a premium valuation with a forward P/E ratio of 30.

Apple Inc. (AAPL) has reported a significant turnaround in its iPhone sales in China during the second quarter of 2025. According to Counterpoint Research, iPhone sales jumped by 8% year-over-year (YoY) in the quarter, ending June 2025 [1]. This marks the first time Apple has seen an increase in iPhone sales in China since mid-2023, reversing a two-year streak of declining sales.

The rebound can be attributed to strategic pricing and trade-in offers that were well timed ahead of China’s mid-June 618 shopping event [1]. The iPhone 16 Pro and iPhone 16 Pro Max models were particularly successful, driven by aggressive price cuts and a national subsidy program [2]. These factors helped Apple capture a substantial portion of the market.

Despite the positive sales figures, Apple’s stock experienced a slight dip of 0.1% after the opening bell on Thursday, July 2, 2025 [3]. The company continues to face challenges, including trade-related threats from the U.S. President Donald Trump and increasing pressure from domestic rivals like Huawei and Vivo [1].

Huawei, in particular, has seen a 12% YoY sales improvement, potentially claiming the top position in the Chinese smartphone market for the second quarter (Q2) [1]. Vivo, while recording a 9% drop in sales compared to last year, still holds the second position by market share [2]. Apple remains in third place, indicating intense competition in the Chinese market.

The iPhone 16e, a lower-cost model, has also played a role in Apple’s growth by attracting buyers from the midrange market and expanding its customer base beyond the premium segment [2]. This strategy has helped Apple navigate the slowing economy and consumers' increasing wariness of high prices for premium devices.

Looking ahead, Apple’s success in the second quarter is a sign of its resilience and ability to navigate the complexities of the premium Chinese market. However, the company will need to continue innovating and adapting to maintain its market share in the face of intense competition from local brands [2].

In summary, Apple's iPhone sales rebound in China during Q2 2025 is a positive indicator for the company, driven by strategic pricing, trade-in offers, and a national subsidy program. While the stock experienced a slight dip, the overall financial outlook remains positive, with Apple continuing to capitalize on the critical Chinese market.

References:
[1] https://stocktwits.com/news-articles/markets/equity/apple-china-iphone-sales-rebound-in-q2/chFjtV8RcnA
[2] https://www.phonearena.com/news/Apples-sales-in-China-grew-for-the-first-time-in-two-years-but-theres-another-champion_id171961
[3] https://www.nasdaq.com/articles/apple-aapl-sees-more-significant-dip-broader-market-some-facts-know