iPhone Loses Top 5 Spot in China as Domestic Brands Dominate Q2 2024

iPhone Loses Ground in China's Competitive Smartphone Market

In a historic shift, Apple's iPhone has fallen out of the top five smartphone brands in China for the second quarter of 2024, according to a recent report by Canalys. This marks the first time that domestic manufacturers have monopolized the top positions in the world's largest smartphone market.

The first-ever dominance of domestic brands in China's smartphone market during Q2 2024 is illustrated here with the data reflecting market positions

Domestic Brands Take the Lead

The Q2 2024 rankings in China's smartphone market are as follows:

1. Vivo: 19% market share (13.1 million units, +15% YoY)
2. Oppo: 16% market share (11.3 million units, -1% YoY)
3. Honor: 15% market share (10.7 million units, +4% YoY)
4. Huawei: 15% market share (10.6 million units, +41% YoY)
5. Xiaomi: 14% market share (10 million units, +17% YoY)

Notably, Huawei experienced the largest year-over-year growth at 41%, likely boosted by the release of its Pura 70 flagship line.

Apple's Challenges in China

This development comes after a period of recovery for Apple in China earlier this year. The company had faced challenges, including:

• The release of Huawei's Mate 60 line with a domestically designed 5G chip
• Bans on iPhone use in Chinese government offices

While Apple had shown signs of resurgence in April and May, with year-over-year iPhone shipments rising 52% and 40% respectively, the latest data suggests a reversal of this trend.

Market Trends and Future Outlook

Toby Zhu, Canalys Senior Analyst, highlighted three key trends that will shape the Chinese smartphone market in the second half of 2024:

1. Huawei's upcoming launch of HarmonyOS Next, positioning it as a potential third major mobile OS
2. Increased investment in AI infrastructure and applications by local players
3. Intensified overseas expansion efforts by Chinese brands

Overall, the Chinese smartphone market showed signs of recovery in Q2 2024, with total shipments reaching 70.5 million units, a 10% increase from the previous year.

As competition intensifies, Apple may need to reassess its strategy in China. Reports suggest the company is working on a clamshell foldable iPhone, potentially targeting a 2026 release to regain its competitive edge in this crucial market.

Update: Sunday July 28 18:06

While Apple faces challenges in China, the company is experiencing contrasting fortunes in the United States. According to recent reports, the second quarter of 2024 saw a significant increase in Android users switching to iPhones in the US market. Approximately 17% of iPhone buyers were former Android users, marking the highest Q2 percentage in years. This trend suggests a growing appeal of the iPhone ecosystem in the US, despite the release of newer Android flagships. Factors driving this switch include Apple's tightly integrated ecosystem, consistent user experience across devices, and uniform update schedules. To address its struggles in China, Apple's COO Jeff Williams has visited the country to meet with officials, reaffirming the company's commitment to the Chinese market. Analysts suggest localizing the Apple Intelligence platform for China, and the upcoming iPhone 16 lineup presents an opportunity for Apple to regain market share in this crucial market.

Young users engaging with smartphones symbolize the growing popularity of mobile technology and brand competition in today's market