Local competitors are gaining momentum, and iPhone's market share in China has dropped out of the top five for the first time in four years

According to the financial news app Zhitong Finance, in the second quarter, Apple (AAPL.US) saw a decrease in market share in the Chinese smartphone market, while local Chinese companies such as Huawei took a significant lead. Data from the market tracking agency International Data Corporation (IDC) shows that during the same period, iPhone shipments in China declined by 3.1%, while shipments of Android competitors increased by 11% year-on-year, resulting in Apple being pushed out of the top five smartphone manufacturers in China for the first time in four years.

The highly anticipated iPhone, a core product of Apple's consumer electronics empire, faced challenges in the Chinese market this year. Retailers and Apple itself resorted to significant discounts as the once popular product struggled to maintain its appeal. Economic factors led to a slowdown in sales, while domestic champion Huawei led the resurgence of Android competitors. According to a report by market research company Canalys, iPhone shipments in China declined by 3.9% during the same period.

Just a few months ago, government data showed that Apple's sales surged by over 40% in April and May, indicating a potential recovery. However, IDC's data indicates that the company's shipments declined last month due to concerns from local partners about profitability.

Reports from government agencies and research firms like IDC show discrepancies. National statistical data tracks the number of smartphones registered with the government before being shipped to retail stores, while IDC focuses on actual deliveries to retail partners, which are more closely related to sales figures.

IDC analyst Will Wong stated, "We did see year-on-year growth in shipments in April and May, especially in April, in preparation for the 618 shopping festival." "However, offline channel partners who are less willing to spend on marketing slowed down in the last month of the second quarter of the 24th year to ensure profitability."

Assessing iPhone shipments remains a challenging task, especially in the increasingly volatile post-pandemic environment. In May of this year, Apple CEO Tim Cook mentioned that despite the general estimation of a decline in iPhone shipments in China, revenue from iPhones increased in the first quarter, surprising many analysts.

According to IDC's data, Huawei's shipments grew by 50% in the most recent quarter, leading to its recovery and pushing Apple to the sixth position in the market, amidst intense competition from local manufacturers like Vivo and Xiaomi. Global iPhone shipments remained relatively stable in this quarter. Apple is set to release its quarterly data on August 1st.

On a global scale, the company aims to ship at least 90 million iPhone 16 units in the second half of this year, hoping that artificial intelligence services will effectively boost demand for new products after the turbulent year of 2023. Apple has informed suppliers and partners that their goal is to increase shipments of the new iPhone model by around 10% compared to the previous generation.

IDC analyst Nabila Popal commented, "Compared to 2020, Apple's position in China has significantly improved, with a market share of 13.6% currently, compared to 8.3% in the third quarter of 2020, with shipments increasing by nearly 40%."