Sales of foreign-branded phones in China, including Apple’s iPhone, dropped 31.3% year-on-year in June, according to Reuters’ calculations based on data from the China Academy of Information and Communications Technology.

Shipments of foreign-branded phones fell to about 2 million units in June, down from 2.9 million a year ago.

Total phone sales in China dropped 9.3% to 22.6 million units during the same period.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Government subsidies create structural market disadvantage for foreign brands

China’s smartphone subsidy program launched in January 2025 offers 15% discounts on devices priced below CNY 6,000 (~$832), which strategically excludes most premium foreign models 23.

This policy design has measurably boosted domestic competitors—Huawei saw a 28.5% sales increase while Apple’s sales dropped 7.7% following the program’s launch 2.

The subsidy program contributed to a 2.5% year-on-year increase in overall smartphone sales while foreign brands faced steep declines, demonstrating how targeted government support can reshape competitive dynamics 2.

The policy’s impact becomes clear when comparing market segments: domestic brands now capture over 60% of AI smartphone sales and 90% of the foldable smartphone market 3.

2️⃣ Foreign brand decline reflects acceleration of decade-long competitive shift

The current foreign phone sales drop of 31.3% in June represents an acceleration of competitive displacement that began years earlier 1.

Samsung’s trajectory illustrates this longer trend—the company held a 30% smartphone market share in China in 2011 but has since declined to less than 1% and closed its last Chinese smartphone factory in 2019 4.

Apple’s struggles mirror this pattern, with only three profitable quarters out of the last twelve in China, including an 11% drop in Q1 2025 and 13% drop in Q1 2024 2.

Even as Huawei regained the top position with 18% market share in Q2 2025, Apple fell to fifth place with 10.1 million units shipped, highlighting how domestic brands have systematically gained ground 5.

This competitive shift reflects local brands’ ability to adapt to Chinese consumer preferences while foreign companies struggled to maintain relevance in the world’s largest smartphone market.