Apple still leads high-end smartphone sales in China, but Huawei and Honor are catching up

Apple in the first quarter shipped nearly 4 million fewer iPhones than a year ago in China, putting it behind Honor and Huawei, according to IDC
Apple is still No 1 in China’s premium segment, which consists of handsets priced over US$600, but it is losing market share to Honor and Huawei

Apple

Che Panin Beijing

Published: 12:00pm, 25 Apr 2024

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Apple’s dominance in China’s high-end smartphone market is being challenged by local rivals, including US-sanctioned Huawei Technologies, according to new data from industry consultancy IDC.

While smartphone shipments in China rose 6.5 per cent to 69.3 million devices in the first quarter, Apple shipped 10.8 million iPhones, down from 14.7 million in the fourth quarter last year, IDC data showed.

The US tech giant, which was the top smartphone vendor in the last quarter of 2023, saw its market share in the past quarter fall to 15.6 per cent from 17.8 per cent a year earlier. It lagged Chinese manufacturers Honor and Huawei, which grabbed 17.1 per cent and 17 per cent of the market, respectively.

The IDC data is in line with findings published earlier this week by another research firm, Counterpoint, which also showed Apple’s market share shrinking, although Counterpoint placed Vivo and Honor in second and third place, respectively.

Customers listen to staff introducing Huawei’s new smartphones at the brand’s flagship store in Shanghai, China. Photo: Reuters

“Apple faces increasing competition despite its strategy to prop up sales by cutting prices,” said Antonio Wang, vice-president of IDC China.

Foldable phones will be key for Android smartphone brands seeking to compete with the iPhone in the high-end market, according to Wang. Handsets with such designs and artificial intelligence (AI) features are poised to boost smartphone sales in China, with total smartphone shipments this year rising 3.1 per cent to reach 279 million, he added.

Unlike some of its rivals, Apple has yet to integrate its smartphones with generative AI features, popularised by OpenAI’s ChatGPT. The Cupertino, California-based company is expected to unveil its AI strategy during its annual developers’ conference in June.

Apple is also exploring a tie-up with Chinese web search and AI giant Baidu to install the latter’s Ernie chatbot on iPhones sold in China, according to a report by The Wall Street Journal last month.

Despite losing out to domestic brands in China’s overall smartphone market, Apple still topped the premium segment, which consists of handsets priced over US$600. However, its market share dropped to 58 per cent in the March quarter from 70 per cent a year ago, according to Arthur Guo, senior research analyst at IDC China.

The fall can be attributed to economic woes in the world’s second-largest economy, which prompted consumers to consider budget phones, as well as competition from Huawei, its spin-off Honor and other domestic manufacturers.

Huawei’s share in the high-end market jumped to 20 per cent in the past quarter, up from 12 per cent a year earlier, thanks mainly to strong demand for its 5G-enabled Mate 60 series, Guo said. Honor’s share also expanded steadily to reach 9 per cent.

“Huawei’s comeback has disrupted the market equilibrium,” Wang said, while adding that Huawei still faces “supply-chain bottlenecks” that could impede its growth.

Globally, smartphone makers shipped a total of 289 million units in the first quarter, marking a 7.8 per cent year-on-year rebound and continuing a growth trajectory for the third quarter in a row, according to IDC.