Apple iPhone Sales Plunge in China as Huawei Dominates

In a battleground of smartphone giants, Apple faced a significant dip in iPhone sales in China during the first quarter of this year, facing fierce competition from the domestic powerhouse Huawei. According to the latest report from Counterpoint Research, Apple experienced a sharp decline of 19.1% in iPhone sales, while Huawei witnessed a remarkable surge of 69.7% in smartphone sales.

Huawei’s resurgence was largely fueled by the launch of its Mate 60 smartphone, equipped with a cutting-edge chip supporting next-generation 5G mobile connectivity. Despite facing severe sanctions imposed by the U.S. in 2019, Huawei has managed to make a strong comeback, ranking as the fourth-largest smartphone maker in China, directly challenging Apple, which holds the third position.

The competition has intensified in the premium segment, impacting Apple’s sales, as noted by Ivan Lam, senior research analyst for Counterpoint Research. Lam mentioned that Apple's replacement demand has been relatively subdued compared to previous years. However, there's still hope for Apple's resurgence in China. Lam suggested that new color options, aggressive discounts, and the introduction of new AI features, expected to be unveiled at the Worldwide Developers Conference (WWDC) in June, could potentially bolster Apple’s position in the market.

Looking at the broader picture, the smartphone industry in China experienced a 1.5% year-on-year growth in the first quarter of 2024, marking the second consecutive quarter of positive growth. Counterpoint Research predicts low single-digit year-on-year growth for China’s smartphone market in 2024. 

Furthermore, Chinese smartphone manufacturers are set to drive demand for new mobile phones by embedding AI features into their handsets. Companies like Xiaomi and Oppo have integrated Qualcomm’s Snapdragon 8 Gen 3 processor, designed for AI applications, into their latest flagship phones. Meanwhile, Huawei spinoff Honor introduced an AI-powered eye-tracking feature in its latest flagship smartphone, the Magic 6 Pro, allowing users to control a car using just their eyes. With these advancements, Chinese smartphone firms are expected to incorporate new AI technologies into their mid-price range phones in the future, according to Counterpoint Research.