The latest report from Canalys reveals a significant shift in the smartphone market in China, with Apple being edged out of the top five smartphone vendors list in the second quarter. The intense competition from domestic brands such as Huawei has led to a decline in Apple’s market share, which shrank to 14% in the second quarter from 15% in the first quarter and 16% a year ago. This marks a significant drop for Apple, which was the third-largest smartphone vendor in China in the second quarter of the previous year.
For the first time in history, domestic vendors have managed to dominate all the top five positions in the Chinese smartphone market. This shift is attributed to Chinese vendors’ strategies for high-end products and their deep collaboration with local supply chains. Honor’s latest Magic V3, which leverages GenAI, has been praised for significantly enhancing the user experience of foldable devices, showcasing the innovative approach of domestic brands.
Apple is currently facing a “bottleneck” in the Chinese market as it works to stabilize retail prices and protect the margins of its channel partners. The company has witnessed declining shipments since the first quarter, indicating a need for strategic changes in its approach to the market. Canalys suggests that the localization of Apple Intelligence services in China will be crucial in the next 12 months, as Chinese brands continue to incorporate generative AI into their products.
During the second quarter, Vivo emerged as the top smartphone vendor in China with a 19% market share and 13.1 million units shipped. This success was driven by strong offline and online sales during the “618” e-commerce festival. Oppo maintained its second-place position with 11.3 million units shipped, while Huawei spinoff Honor came in third with 10.7 million units shipped, indicating a year-on-year increase of 4%. Huawei itself secured the fourth spot with a 15% market share and 10.6 million shipment units, showcasing a resurgence in its consumer business.
Xiaomi rounded out the top five smartphone vendors in China with solid sales of its K70 and flagship 14 series. The buzz surrounding its first electric car, the SU7, also contributed to its success in the market. Overall, the Chinese smartphone market experienced a 10% year-on-year growth in the second quarter, with shipments exceeding 70 million units.
The changing landscape of smartphone vendors in China highlights the fierce competition in the market and the need for continuous innovation and adaptation to succeed in this dynamic industry. As domestic brands continue to strengthen their positions, international players like Apple will need to reevaluate their strategies to remain competitive in the evolving market.