Huawei and Other Local Competitors Pose Strong Challenge to Apple iPhone in China
Apple’s smartphone shipments in China fell 2.1% in the fourth quarter of 2023 from a year earlier, hurt by a tightening of local rivals led by Huawei, data from research firm IDC showed on Thursday.
The drop underscores the challenges the U.S. company faces in its third-largest market, as some Chinese companies and government agencies restrict employees’ use of Apple devices, mirroring the U.S. government’s restrictions on Chinese apps over security concerns.
Huawei, whose smartphone business was decimated by US sanctions, also made a comeback last year with new launches, intensifying competition in the world’s largest smartphone market, which grew just 1.2% in the fourth quarter of 2023.
Huawei’s shipments grew 36.2% in the fourth quarter of the year, IDC figures showed. The company became the fourth largest smartphone supplier in China in the period with a 13.9 percent market share, compared to 10.3 percent in the corresponding quarter.
However, according to IDC, Apple overtook Vivo for the entire year 2023 and became the largest seller of smartphones with a 17.3 percent market share. This is the first time that Apple has become China’s best seller, but analysts predict that its sales will come under pressure again this year.
IDC said competing products and Apple’s limited product updates have affected Apple’s high-end market share in China, reducing the iPhone’s overall appeal.
It said Apple continued to attract demand from many consumers through significant discounts and promotions through third-party distribution channels.
Earlier this month, Apple offered rare discounts on its iPhones, cutting retail prices by as much as 500 yuan ($70) amid growing competitive pressure.
Analysts at Jefferies predicted earlier this month that Apple’s shipments would continue to decline by double digits in 2024, while Huawei is seen strengthening its market share.
They estimate that Huawei will ship around 64 million smartphones worldwide in 2024, a significant increase from less than 35 million units in 2023.
Overall, China’s smartphone market shipped 73.63 million units in the last quarter. Full-year shipments were 271 million units, down 5%, IDC said.
Apple will release its quarterly results next week.
