Huawei, whose smartphone business suffered due to US sanctions, staged a comeback last year with the introduction of new smartphone models.
Apple’s smartphone shipments in China shrank 2.1 percent in the final quarter of 2023 from the same year-ago period, hurt by intensifying competition from local rivals led by Huawei, data from research firm IDC showed on Thursday.
The drop underscores the challenges facing the US firm in its third biggest market, as some Chinese companies and government agencies limit employees’ use of Apple devices, a measure that mirrors US government restrictions on Chinese apps on security grounds.
Huawei, whose smartphone business was decimated by US sanctions, also made a comeback last year with new launches, intensifying competition in the world’s biggest smartphone market that grew just 1.2 percent in the final quarter of 2023.
Huawei’s shipments increased 36.2 percent in the last quarter of the year, the IDC figures showed. The company became the fourth largest smartphone vendor in China in the period with a 13.9 percent market share, up from 10.3 percent in the same year-ago quarter.
For the full year 2023, however, Apple overtook Vivo to become the top smartphone seller with a 17.3 percent market share, according to IDC. This marks the first time Apple became the top seller in China, but analysts predict its sales will come under pressure again this year.
IDC said Apple’s high-end market share in China has been impacted by rival products and limited product upgrades by Apple which reduced the overall attractiveness of iPhone models.
Apple continues to attract consumer demand in China through substantial discounts and promotions offered via third-party distribution channels. In response to growing competitive pressure, Apple recently implemented rare discounts on iPhones, reducing retail prices by as much as CNY 500 ($70 or approximately Rs. 5,800).
Analysts from Jefferies anticipate a continued double-digit decline in Apple’s shipment volumes throughout 2024, while Huawei is expected to strengthen its market share. The projections suggest that Huawei will ship approximately 64 million smartphones globally in 2024, a significant increase from the projected less than 35 million units for 2023.
According to IDC, the overall shipment volume in China’s smartphone market for the fourth quarter was 73.63 million units, contributing to a full-year shipment volume of 271 million units, representing a 5% decrease.
Apple is set to release its quarterly results next week.