Apple Is No Longer among the Top 5 Smartphone Vendors in China

After facing a whopping 19.1% decline in sales in China in the first quarter of 2024, Apple has now been ousted from the list of the top 5 smartphone makers in China in this quarter amidst growing competition from domestic brands such as Huawei, Xiaomi, and Vivo, according to a report by Canalys.

Also, Apple’s annual sales in China have dropped by 3.1%, while the sales of other Androids have increased by 11.1%. Perhaps some of this has to do with China banning iPhones in government offices.

“It is the first quarter in history that domestic vendors dominate all the top five positions.” – Lucas Zhong, a research analyst at Canalys 

In the second quarter of last year, Apple was the third-largest smartphone vendor in China. Now, it has slipped to the sixth position with only 9.7 million shipments.

It’s also worth noting that Apple lost its position as the #1 smartphone maker in the world to Samsung in April of this year.

A Glimpse at the Top 5 Spots

Reason behind Apple’s Falling Sales

Apple’s poor performance is resulting from its own shortcomings because the smartphone market in China is doing quite well at the moment. The overall market grew by 9-10% compared to Q2 last year.

Reason #1

A major reason is the growing competition from native Chinese companies. For example, Huawei has had one of the best years for a smartphone maker, ever.

According to reports, Huawei’s year-on-year growth was between 41% to 50%. This is because Huawei (and other Chinese brands, too) are now focusing on creating high-end products and are heavily investing in generative AI. This means that locals in China no longer have to rely on foreign brands to get their hands on the latest technology.

Reason #2

The second reason could be Apple’s pricing. Apple’s pre-discount prices are higher as compared to Vivo, Honor, Huawei, and other Chinese companies.

Furthermore, as I’ve said time and again, Apple, for a long time, has been able to charge exorbitant prices primarily because of the social stigma attached to iPhones. However, this tactic is no longer working.

Apple did try to improve the pricing situation, though. However, even after heavily discounting iPhones to increase its shipments, its numbers continue to lag behind its competitors.

Also, I don’t think Apple can afford to slash iPhone prices any more because that can cause havoc in other Asian markets (such as India), where Apple’s sky-high pricing tactic is working well.

Reason #3

Also, Apple’s stubbornness to offer some below-par features on its base iPhones is certainly appalling. A 60Hz refresh rate screen for around $700? Are you kidding us, Apple? Even a $150 Xiaomi smartphone offers 120Hz minimum.

The only hope for a comeback right now—given that I don’t see Apple reducing its prices by, say, 20-40%—is through Apple Intelligence. It’s Apple’s native intelligence system built on generative AI that adds a bunch of new ways to experience your Apple products better.

However, recent reports suggest that the release of Apple Intelligence features is set to be delayed.

The Bottom Line

To conclude, between its dwindling sales in China, the ‘monopoly’ lawsuit by the DOJ, multiple spyware attack warnings to users worldwide, and controversy around its marketing tactics, things are certainly not looking good for one of the biggest companies in the world. Can Apple turn it around? Stay tuned to find out.

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