Recent reports from Canalys have shown a significant shift in the smartphone market in China, with Apple being edged out of the top five vendors list in the second quarter. The competition from domestic brands, especially Huawei, has intensified, leading to a decrease in Apple’s market share in the region. From 15% in the first quarter to 14% in the second quarter, and 16% a year ago, Apple has seen a decline in its presence in the Chinese market.
According to Canalys analyst Lucas Zhong, this is the first time in history that domestic vendors have dominated all the top five positions in the Chinese smartphone market. Chinese brands have been implementing strategies focused on high-end products and deep collaborations with local supply chains, resulting in hardware and software features that are resonating with consumers. For example, Honor’s latest Magic V3, leveraging GenAI, has significantly enhanced the user experience of foldable devices.
On the other hand, Apple is facing challenges in the Chinese market, with a need to stabilize retail prices and protect the margins of channel partners. As Chinese brands aggressively incorporate generative AI into their products, Apple will need to localize its intelligence services in China to stay competitive. Canalys predicts that this will be a crucial move for Apple in the next 12 months.
During the second quarter, Vivo reclaimed the top spot in the Chinese smartphone market with a 19% market share and 13.1 million units shipped. This was largely driven by strong offline and online sales during the “618” e-commerce festival. Oppo maintained second place with 11.3 million units, while Huawei spinoff Honor came in third with 10.7 million units shipped. Huawei itself came fourth, with a 15% market share, showing a resurgence in its consumer business in China.
Despite these changes in market dynamics, the Chinese smartphone market as a whole saw a 10% year-on-year growth in the second quarter. With shipments exceeding 70 million units, the market continues to evolve rapidly, driven by technological advancements and shifting consumer preferences. As domestic brands continue to innovate and expand their offerings, it will be interesting to see how international players like Apple adapt to the changing landscape in China.
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