iPhone maker Apple (AAPL) fell to the third position in China’s smartphone market in 2024. Apple lost its leading position to domestic rivals Vivo and Huawei, with its annual shipments to China down 17%, according to Reuters, which cited data from research firm Canalys. Apple witnessed a steady decline in iPhone shipments to China in all four quarters of 2024, with a notable 25% year-over-year drop in Q4.
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Here’s How Apple Fared Against Domestic Rivals in China
This was Apple’s largest annual percentage drop in China shipments to date. Interestingly, for the full year 2024, competitor Vivo gained a 17% market share, followed by Huawei at the second spot, boasting a 16% market share. The third spot was taken by Apple, followed by OPPO and Honor at the fourth and fifth spots, respectively, each with a 15% market share. Although the market share differences are minuscule, it shows the growing pressure on smartphone makers to differentiate and give enhanced value to buyers.
Compared to the fourth quarter of 2023, Xiaomi (XIACF) recorded a 29% jump, Huawei saw a 24% rise, and Oppo and Vivo followed suit with 18% and 14% growth in shipments, respectively. Overall, annual shipments to China in 2024 grew to 285 million units, showing a 4% increase compared to 2023. Despite offering four-day-long (January 4 to 7) special discounts of up to 500 yuan on iPhone 16 models in China, Apple’s shipments fell by 25% in the last quarter.
Reasons For iPhone’s Lackluster Demand
One of the main reasons behind Apple’s dragging sales in Q4 was the absence of AI (artificial intelligence) features in the latest iPhones sold on the mainland. The competition in China remains ripe with the advent of domestic foldable phones at competitive prices. Also, consumers are shifting to Android-operated smartphones such as Xiaomi and Vivo, which are loaded with innovations.
Android is Alphabet-owned (GOOGL) Google’s mobile operating system. For 2025, Canalys projects that smartphone shipments to China will grow over 290 million units. This will be driven by the government’s subsidy policy, the steadily recovering global smartphone market, an improving macroeconomic environment, and technological advancements.
Is Apple Stock a Buy or Sell Right Now?
Wall Street remains divided on Apple stock due to its diminishing China market share. On TipRanks, AAPL stock has a Moderate Buy consensus rating based on 19 Buys, seven Holds, and three Sell ratings. Also, the average Apple price target of $244.77 implies 2.9% upside potential from current levels. In the past year, AAPL shares have gained 30.2%.
