IPhone shipments in China are projected to decline by 1.9% in 2025, according to market research firm IDC.

This decrease is attributed to rising competition from domestic brands and a slowing economy.

The exclusion of many iPhone models from a government subsidy program for consumer electronics priced under 6,000 yuan (US$818) has also impacted shipments.

In contrast, total smartphone shipments in China are expected to grow by 3% this year, driven by increased demand for Android devices supported by state subsidies.

Apple continue to face challenges in China, its second-largest market. Domestic competitors, particularly Huawei, have regained market share in the premium smartphone segment by integrating advanced AI features.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ China’s smartphone market undergoes significant structural shift

The decline in Apple’s Chinese market share represents a broader structural shift toward domestic manufacturers rather than just a temporary fluctuation.

Apple’s market share in China dropped from 20% in Q1 2023 to 16% in Q1 2024, while Huawei achieved remarkable 60% year-on-year growth during the same period 1.

By Q2 2024, Apple had dropped out of China’s top five smartphone vendors for the first time, shipping approximately 9.7 million units, a 25% year-on-year decline 2.

This shift reflects a maturing market where domestic manufacturers have significantly narrowed the technology gap with international competitors, particularly in premium segments where Apple traditionally dominated.

Government policies have accelerated this transition, with subsidies specifically targeting devices under 6,000 yuan ($818), a price point that excludes most iPhone models while benefiting domestic Android manufacturers.

The broader Chinese smartphone market is actually growing, up 4% year-on-year in 2024 after two years of decline, indicating that Apple’s challenges are not merely a reflection of overall market conditions 3.

2️⃣ Apple faces strategic pricing dilemma in competitive Chinese market

Apple’s commitment to premium pricing creates a particular vulnerability in China’s increasingly price-sensitive and feature-competitive market.