Apple Smartphone Sales In China Drop 6.7 Percent, Canalys Finds

Apple’s fortunes in mainland China are under the spotlight, after new research from research house Canalys revealed the second quarter shipment figures.

Canalys announced the ‘mainland China’s smartphone market’ had experienced 10 percent year-on-year growth in Q2 2024, with shipments exceeding 70 million units.

But Apple languishes in sixth position, with a shrinking market share, behind that of local smartphone brands.

China is one of Apple’s key markets, but earlier this year Counterpoint Research had revealed that during the first quarter, Apple’s iPhone sales in China had fallen 19 percent, after Huawei experienced a 69.7 percent surge in smartphone sales in the country during the same period.

Smartphone shipments

Now the Canalys research has found that iPhone shipments during the second quarter dell by 6.7 percent, underscoring the challenges in China for Tim Cook and co.

Indeed, Apple’s total shipments in China for the quarter ending in June stood at 9.7 million units, down from 10.4 million units in the same quarter last year, Canalys data showed.

And as mentioned above, Apple is ranked in sixth position in China (Apple’s third largest market). Apple currently has a market share of 14 percent in mainland China, down from 16 percent a year ago.

As a result of this decline, Apple’s ranking in the Chinese smartphone market fell from third to sixth place.

So who is ahead of Apple in this market?

Well according to Canalys, the leading smartphone supplier in China (based on shipments) has changed, after Vivo reclaimed the number one spot by shipping 13.1 million units, capturing a 19 percent market share.

This growth, a 15 percent increase over the previous year, was driven by strong performance in offline channels and robust online sales during the “618” e-commerce festival.

Oppo held onto second place, shipping 11.3 million units, buoyed by the launch of its new Reno 12 series. Third was Honor, with shipments of 10.7 million units, marking a 4 percent year-on-year increase.

Huawei took the fourth spot with shipments of 10.6 million units, as its growth has slowed slightly.

Xiaomi saw a 17 percent year-on-year increase and re-entered the top five by shipping 10 million units, Canalys found. The significant marketing buzz this quarter surrounding Xiaomi’s first electric car, the SU7, was one of the contributors to solid sales of its K70 and flagship 14 series, the researcher stated.

China recovery

“The Chinese market is finally aligning with global recovery speeds,” commented Canalys Research Manager Amber Liu. “This was largely driven by the supply side, which leverages nationwide sales events such as ‘618’. In collaboration with e-commerce platforms, smartphone vendors initiated the promotional cycle with significant discounts and promotions, which started much earlier this year.”

“Additionally, vendors with a comprehensive smart device portfolio, such as Huawei and Xiaomi, are enhancing their offline channel advantage by expanding their channel partners and promoting the up-sell and cross-sell of products within their smart device ecosystems,” said Liu.

“It is the first quarter in history that domestic vendors dominate all the top five positions,” added Canalys Research Analyst Lucas Zhong. “Chinese vendors’ strategies for high-end products and their deep collaboration with local supply chains are starting to pay off in hardware and software features.”

“Conversely, Apple is facing a bottleneck in mainland China,” said Zhong. “The vendor’s current channel strategy maintains a healthy inventory level and aims to stabilise retail prices and protect margins of channel partners. In the long term, the Chinese high-end market is ripe with opportunity. Local brands such as Huawei, HONOR, OPPO, and vivo are leading the way by incorporating technologies such as GenAI into products and services. Additionally, the localisation of Apple’s Intelligence services in mainland China will be crucial in the next 12 months.”