Apple is facing increasingly strong competition in China, particularly from domestic smartphone maker Huawei.
According to Counterpoint iPhone sales fell by more than 19% in the first three months of 2024, while Huawei smartphone sales grew by 69.7% over the same period. These figures are largely due to the launch of Huawei Mate 60 with a high-quality 5G-enabled chip.
Since 2019, the United States has imposed sanctions on the Chinese company, blocking access to important technologies and nearly destroying its smartphone business. Now Huawei is back and is now the fourth largest smartphone maker in China (Apple is still in third place).
«Apple’s sales declined during the quarter as Huawei’s comeback directly impacted companies in the premium segment», said Ivan Lam, senior research analyst at Counterpoint Research. «In addition, the demand for Apple’s replacement has declined slightly compared to previous years».
Lam adds that the iPhone maker could still see a recovery in China with the release of flagship devices in new colors, the launch of aggressive discounts, and the introduction of AI features into smartphones (their promise to present at WWDC in June).
Looking at the overall picture of smartphone sales in China, they grew by 1.5% compared to the first quarter of 2023.
Counterpoint expects AI features built into phones from Chinese smartphone makers to drive a recovery in demand for new mobile phones. Chinese device makers Xiaomi and Oppo have integrated Qualcomm’s Snapdragon 8 Gen 3 processor, designed for AI applications, into their latest flagship phones.Meanwhile, Honor has demonstrated a feature in its latest flagship smartphone, the Magic 6 Pro, that allows the user to drive a car using their eyes.