Apple's China Struggles: iPhone Sales Plunge as Huawei Reclaims Top Spot

Apple's once-dominant position in the Chinese smartphone market is facing a significant challenge, as iPhone sales have plummeted, and Huawei has reclaimed the top spot. This shift in market dynamics has raised concerns about Apple's future in one of its most crucial markets.

In the fourth quarter of 2024, Apple's smartphone shipments in China dropped by 25%, according to Canalys. This decline pushed Apple's market share down to 17%, narrowly maintaining its lead over Huawei, which captured a 17% market share with shipments of 12.9 million units. Huawei's resurgence can be attributed to its return to the premium segment with locally-made chipsets, which have proven popular among Chinese consumers.

Apple has responded to the intensifying competition by offering rare discounts and promotions to stimulate sales. In January 2024, the company launched a four-day promotion, offering price cuts of up to 500 yuan ($68.50) on its iPhone 16 models through its official channels. Major Chinese e-commerce platforms, such as Alibaba's Tmall marketplace, followed suit with their own promotions, offering discounts of up to 1,000 yuan ($137) on iPhone 15 series devices.

However, these discounts and promotions may not be enough to reverse the trend of declining iPhone sales in China. Apple's cautious approach to production planning for 2025 reflects its awareness of the challenges it faces in the market. Even the launch of the iPhone SE 4 (aka iPhone 16e) in the first half of 2025 may not be enough to save Apple's weakening position in China.

Geopolitical tensions have also played a role in Apple's struggles in China. The US government's actions against Huawei, including sanctions that cut ties between Huawei and Android-maker Google, have led to a resurgence in Huawei's popularity in China. This has put Apple under pressure, as consumers who once would have considered Apple are now turning to national brands like Huawei. Additionally, nationalism and cautious consumer sentiment have made it challenging for Apple to maintain its market share in the face of aggressive pricing from local competitors.

In conclusion, Apple's China struggles deepen as iPhone sales plunge, and Huawei reclaims the top spot in the market. The company faces intense competition from local brands, geopolitical tensions, and cautious consumer sentiment. To counter these challenges, Apple must align its future products more closely with local market preferences while offering meaningful upgrades to justify its premium pricing. The company's ability to regain momentum in China will depend on its ability to adapt to these changing market dynamics and maintain its indispensable status in the world's largest smartphone market.