In a recent report by Canalys, it was revealed that Apple has been edged out of the top five smartphone vendors’ list in China in the second quarter. This decline in market share can be largely attributed to the increasing competition from local brands such as Huawei. Apple’s market share in China dropped to 14% in the second quarter, down from 15% in the first quarter and 16% in the same period a year ago. This marks a significant shift for the tech giant, as it dropped to the sixth spot with approximately 9.7 million shipments.
According to Lucas Zhong, a research analyst at Canalys, this is the first time in history that domestic vendors have taken over all the top five positions in the Chinese smartphone market. Chinese brands are starting to see success in both hardware and software features due to their strategies for high-end products and collaborations with local supply chains. For example, Honor’s latest Magic V3, which utilizes GenAI, has greatly enhanced the user experience of foldable devices.
Apple is facing a “bottleneck” in the Chinese market as it tries to stabilize retail prices and protect the margins of its channel partners. To stay competitive, Canalys suggests that localization of Apple Intelligence services in China will be crucial in the next 12 months. This is especially important as Chinese brands are increasingly incorporating generative AI into their products, creating a demand for more localized services.
In the second quarter, Vivo reclaimed the top spot with a 19% market share and 13.1 million units shipped. This success was largely driven by strong offline and online sales during the “618” e-commerce festival. Oppo maintained second place with 11.3 million units shipped, boosted by the launch of its new Reno 12 series. Huawei spinoff Honor came in third with 10.7 million units shipped, showing a 4% year-on-year increase. Huawei itself came in fourth with a 15% market share and 10.6 million shipments, marking a significant comeback in the Chinese market. Xiaomi rounded out the top five with solid sales of its K70 and flagship 14 series, driven by the buzz surrounding its first electric car, the SU7.
Overall, the Chinese smartphone market experienced a 10% year-on-year growth in the second quarter, with shipments exceeding 70 million units. This growth is a testament to the evolving landscape of smartphone vendors in China, with local brands making significant strides in both innovation and market share. As the competition continues to intensify, it will be interesting to see how Apple and other global players adapt to the changing dynamics of the Chinese market.