Apple Struggles in China as Domestic Brands Rise

Apple’s dominance in the Chinese smartphone market is facing a serious challenge. According to a recent Canalys report, the tech giant has been ousted from the top five smartphone vendors in the country for the first time.

The second quarter of 2024 saw a significant decline in Apple’s market share, dropping to 14% from 15% in the previous quarter and 16% a year earlier. This downturn has pushed Apple to the sixth position, with approximately 9.7 million iPhones shipped.

Several factors have contributed to Apple’s decline:

• Intensified competition from domestic brands: Chinese manufacturers like Vivo, Oppo, Huawei, and Honor have made significant strides in developing high-end smartphones with advanced features, often at more competitive prices.
• Focus on high-end market: Apple’s strategy of targeting the premium segment has limited its reach in a market where price sensitivity is high.
• Supply chain challenges: The company has faced obstacles in stabilizing retail prices and protecting margins for its channel partners.

To counter these challenges, Apple is expected to focus on localizing its services, particularly in the realm of artificial intelligence, to better compete with Chinese rivals.

However, the overall Chinese smartphone market has shown growth, with shipments exceeding 70 million units in the second quarter. This indicates a strong domestic demand despite challenges faced by global players like Apple.

As the competition intensifies, it remains to be seen how Apple will adapt its strategy to regain its footing in the crucial Chinese market.

Here is a table showing the smartphone vendors and their market share in China for the second quarter of 2024.