Apple Sinks From First to Fifth Place in Chinese Smartphone Market

[MacRumors]

Analytics company Canalys has released its latest report on China's smartphone market for the first quarter of 2024, and Apple has come off worst among the top five brands jostling for supremacy in Asia's largest economy.

Huawei returned to the top spot after 13 quarters with a 17% market share. The local vendor shipped 11.7 million smartphones, thanks to its popular Mate and nova series, while OPPO rose to second place on strong performance of its Reno 11 series, shipping 10.9 million units. Conversely, HONOR, vivo, and Apple all slowed their sell-ins in the quarter, ranking third, fourth, and fifth, respectively.

HONOR shipped 10.6 million units with a 16% share, a year-on-year increase of 9%, while vivo shipped 10.3 million units with a 15% share, a year-on-year decrease of 9%. Apple declined the most among the top five, sinking to fifth from first place, with 10 million units and a 15% share, which is a year-on-year decrease of 25%.

Huawei's performance is up 70% from a year earlier, when the company was still reorganizing its phone business following U.S. sanctions. Huawei's 5G Mate 60 Pro uses a China-made 7-nanometer processor tailored for the local market, showcasing the kind of advanced semiconductor manufacturing capabilities that US sanctions were originally designed to prevent.

Huawei has since released its new Pure line of flagship smartphones, and has been busy developing its own operating system, HarmonyOS, since it could not use Google's Android and Google Mobile Services. The continued expansion of the HarmonyOS ecosystem breaks the two-horse race of Android and iOS in Mainland China.

The latest data is unlikely to make for pleasant reading for Apple's CEO Tim Cook, following his trip to China for the inauguration of a major new store in Shanghai. During his visit, coming on the back of a strong Chinese fourth quarter, Cook announced the expansion of Apple's R&D center in the city, highlighting China's crucial role in the company's strategy. Cook also attended the China Development Forum in Beijing, where he said the country was "critical" to Apple.

Apple is deepening its ties with China despite expanding production in Southeast Asia and India. Approximately 17% of Apple's net sales from October to December were derived from the greater China region, making it the largest regional supplier in the company's supply chain. But Apple is facing an uphill battle to reverse falling iPhone sales there, with a 24% year-on-year decline in 2023 projected to deepen through 2024.

Article Link: Apple Sinks From First to Fifth Place in Chinese Smartphone Market

 

[WiiDSmoker]

With little to no changes, same design, extremely high prices, low storage - nothing but pure greed, what's to expect?

 

[jonnysods]

It's not surprising, the hardware costs are prohibitive for a lot of people, I think Apple are going to find that even in their bigger markets in the next couple of years the way the economy is squeezing us.

 

[AlmightyKang]

The economics and reasoning behind this is not as obvious as it looks.

Chinese economy is collapsing which is reducing disposable income to spend on technology. That forces people back to inland brands because they are much cheaper. Also the government is restricting use of Apple devices in government positions. This is not because Apple are insecure in particular but because the government has no control over the provision of devices. Looking at political allegiances, there is a West vs East divide and they are hedging their bets on retaining control over their population's devices much like Russia did last year. This increases mindshare of devices when there are so many "government" employees in China.

So don't blame Apple, blame failing Chinese economic policy and geopolitical tensions.

Anyway if you go and look at the backers for some of these other companies you will see the Chinese government directly or indirectly involved.

 

[revs]

Looking at the graph, seems very normal. They'll be way up in Q4?

 

[issacj]

Looking at the chart, for the market share element only, this is not out of line with last year or the year before? See the big jumps for Apple in Q4 with the new releases before descending.

 

[Steve121178]

It's not the done thing to be seen with an iPhone in China anymore, it's frowned upon in fact & also banned in Government & state run agencies.

Because politics & retaliation for the Huawei furore.

 

[cicalinarrot]

With little to no changes, same design, extremely high prices, low storage - nothing but pure greed, what's to expect?

What you call "greed" is Just how business works. Other companies sell cheaper phone because they wouldn't sell otherwise, not because they're less greedy. The market has no human-like soul. Never.

 

[petsk]

Doesn't look too good for Apple. iPhone has stagnated completely, not even a foldable phone yet. Mac OS gets worse with each release. Vision Pro flopping.

 

[SmugMaverick]

With little to no changes, same design, extremely high prices, low storage - nothing but pure greed, what's to expect?

Spot on.

Some will claim its all the Chinese governments doing but let's be honest, brutally honest, Apple has no innovation left for iPhone and hasn't in 7 years now.

They use to have an actual designer in charge of hardware, now its bean counter Jeff Williams and you can see where that's got us, same design for 5 years, no AI, extra buttons.

but but but apple are working on AI now!!! yeah, 2 years too late.

Expect the same all over the world during the next year or so, except for the US because they've got some weird fantasy about bubbles while ignoring everything else.

 

[Tanax]

Sales are falling in the US as well. From 40% of all new phones being sold, to 33%.

It's not so strange. Bad economic times, people hold their money tighter. Add to that the fact that these last new iPhones have seen little things to make people buy new phones as well as iPhones generally holding up pretty well over time.

 

[iPay]

Hi, from limited but recent experience (1 semester in China and 1 in Korea - academic), one senses that China is parting ways with USA and Apple. USA didn't help by banning Huawei and soon TikTok, while retaining its carrier structure that controls the phone market (EU would call them gatekeepers). It makes it difficult for Chinese companies to enter the US Market (Xiaomi, Oppo...: no US sales), and it's quite un-patriotic (not yet risky, but...) in China mainland to buy Apple instead of otherwise very good chinese brands. The general feeling is that Apple sales in China can only decrease from now on.

 

[goshya]

The incompetence of some Apple managers is astonishing. ****** hardware compared to basically all Chinese brands (60hz displays, seriously? Bad reception in China etc.) Chinese killer apps don’t run smoothly on Apple devices (Try WeChat with Apple Watch, no notifications for calls). I’m sorry to say that the color of iMessages is of no importance to anyone in China and instead of improving iOS, it gets buggier with every iteration. Hard to recommend an iPhone to my Chinese colleagues these days.

 

[SmugMaverick]

Hi, from limited but recent experience (1 semester in China and 1 in Korea - academic), one senses that China is parting ways with USA and Apple. USA didn't help by banning Huawei and soon TikTok, while retaining its carrier structure that controls the phone market (EU would call them gatekeepers). It makes it difficult for Chinese companies to enter the US Market (Xiaomi, Oppo...: no US sales), and it's quite un-patriotic (not yet risky, but...) in China mainland to buy Apple instead of otherwise very good chinese brands. The general feeling is that Apple sales in China can only decrease from now on.

Apple pushed for their banning because they were scared, Google forced everyone to improve cameras on phones in 2016 and Chinese brands went even further and Apple couldn't compete.

Now Karma has arrived for Timmy, deserved.

 

[zakarhino]

The economics and reasoning behind this is not as obvious as it looks.

Chinese economy is collapsing which is reducing disposable income to spend on technology. That forces people back to inland brands because they are much cheaper. Also the government is restricting use of Apple devices in government positions. This is not because Apple are insecure in particular but because the government has no control over the provision of devices. Looking at political allegiances, there is a West vs East divide and they are hedging their bets on retaining control over their population's devices much like Russia did last year. This increases mindshare of devices when there are so many "government" employees in China.

So don't blame Apple, blame failing Chinese economic policy and geopolitical tensions.

Anyway if you go and look at the backers for some of these other companies you will see the Chinese government directly or indirectly involved.

China's economy has been "collapsing" and their economic policy has been "failing" for the past 40 years according to "experts" in the West and yet somehow they keep getting richer and stronger. Now they're the biggest economy in the world (PPP) and still growing without relying on tricks like counting credit card debt and overdraft fees as 'growth'.

HarmonyOS development is building up in pace quite rapidly and phones from Xiaomi and Huawei are getting better and better every year, in many respects they outclass the iPhone like with the Xiaomi 14 Ultra's cameras (it's honestly no competition). Look at equivalent 'ecosystem' features in HarmonyOS vs. iOS and you'll see the iPhone is not the clear winner, the iPhone is now just another phone for people in China. Besides the graph shows a Q1 slowdown similar to 2022 so people aren't just abandoning the iPhone out of some economic necessity or government mandate.

The iPhone ban was overblown btw, it just said don't bring your iPhone to work in the same way our government might say don't bring a Korean phone to work, that doesn't mean I can't buy a Korean phone all of a sudden.

Here's a 2024 "expert" letting us know China's economy is collapsing:

https://www.nytimes.com/2024/01/18/opinion/china-economy-xi.html

Here's a 2013 "expert" letting us know China's economy is collapsing:

https://carnegieendowment.org/2013/07/29/will-china-s-economy-crash-pub-52520

Here's a 2001 "expert" letting us know China's economy is collapsing:

The Coming Collapse of China - Wikipedia

en.wikipedia.org

What year do you think it might become true? Because so far the predictions have been comically wrong every year.

 

[deaglecat]

This is why ecosystem lock-in is so important to Apple in the west... objectively, the hardware alone is no longer competitive.

 

[DMG35]

This trend will continue if the iPhone 16 rumors are true. Same design with (gasp) a dedicated camera button!!!

 

[zoozx]

No innovation, extremely high price, what did you expect.
Apple is out of touch, completely out of touch with the consumer and only focused on money.
Has been for a long time.

 

[zakarhino]

Spot on.

Some will claim its all the Chinese governments doing but let's be honest, brutally honest, Apple has no innovation left for iPhone and hasn't in 7 years now.

They use to have an actual designer in charge of hardware, now its bean counter Jeff Williams and you can see where that's got us, same design for 5 years, no AI, extra buttons.

but but but apple are working on AI now!!! yeah, 2 years too late.

Expect the same all over the world during the next year or so, except for the US because they've got some weird fantasy about bubbles while ignoring everything else.

I'm a US iPhone customer and have been using iPhone since the original 2G model. Recently I purchased an S24 Ultra to experiment with because even I'm becoming bored with iOS and iPhone. I returned the S24 but I'm not done with my Android experimentation. If I weren't so locked in to Apple's ecosystem I would experiment with different phones a lot more but if I want to use Android I basically have to always carry an iPhone with me too.

I mention being a US customer because I'm like a lot of other US iPhone users; I use all the iCloud stuff. In China most of the central software experiences are not unique to iPhone and in some ways work better on HarmonyOS or Android so there's less of a reason to stick with iPhone unless you really like the design language (this is a big one for me because I'm used to it) or really care about the privacy features of iCloud and iMessage (yes, iCloud and iMessage data are also E2E encrypted in China using iCloud's Advanced Data Protection).

Like come on Xiaomi are making cars now and they already have an XR glasses product. One of the features on the Xiaomi SU7 car is you can wirelessly beam any app content to the main vehicle's display which is a major step up from how CarPlay currently works (apps have to be supported by the creator).

Ignorance is causing people to believe the only reason one would abandon the hallowed iPhone is because the government is forcing you to, either through economic means or political pressure. If I lived in China I would probably buy a Xiaomi (the car too lol) just for the ecosystem convenience and better support with China's software world.

 

[Kottu]

This is why ecosystem lock-in is so important to Apple in the west... objectively, the hardware alone is no longer competitive.

True, if it wasn't the eco-system, I wouldn't have bought 15PM. Android manufactures are willing to work with companies like Hasselblad (own by DJI now), Leica or Zeiss to improve their products. Apple wants to take credit for everything themselves. When Apple felt threatened by Huawei, they made USA to ban them. Now, even without the help of Google, they rose like a Phoenix.
I am not a fan of Chinese mobiles but they do try to innovate. Like Steve Jobs said, "Never Settle".

 

[zakarhino]

They need a foldable, iOS 18 needs to SLAP with new features (AI especially), and the cameras need a big upgrade. The Xiaomi 14 Ultra's camera modules are INSANE, they are absolutely competitive with APS-C cameras whereas the iPhone and most other Android phones still look like smartphone cameras.

 

[laptech]

Apple sales will not just falter in China but every where else in the world because a vast majority of countries are struggling economically which is having a direct effect on the spending power of it's citizens. It get's mentioned many times in this forum, owners of current iphones looking to upgrade and potential new buyers of iphones are stepping back and now looking deeper into are they getting value for their money. Due to the economic woes of many, spending over $1,000 for a mobile phone has no longer become practical with buyers now turning to cheaper mobile phones because they cannot justify spending large amounts of money on iphones that have not changed over the years.

Also, how much is the Chinese government pushing it's citizens to not purchase mobile phones made by Western companies and instead pushing them to purchase mobile phones made by local companies.

 

[purplerainpurplerain]

These stories are always click bait and market manipulation waste of time. They are comparing sales against budget plastic phones and some of them are state subsidised.

Compare only against direct competition with the same quality and price and NOT assisted by government spending.

It’s also absolutely impossible to verify sales of most things in China. Information is a black box there with no audits and a large gray market.

 

[purplerainpurplerain]

They need a foldable

We see literally nobody with foldable in public but we lots of them in pawn shops where they will soon be joined by unwanted AI devices like rabbit and Humane AI pin thing.

 

[Glideslope]

Microsoft June 7, 2000.