Following a remarkably successful launch quarter, Apple's iPhone sales in China have taken a sharp downturn in the first quarter of 2024. Reports from Counterpoint Research and Canalys reveal that the tech giant saw its largest quarterly sales drop ever in the region, with a decline of up to 25% year over year.
According to Canalys, Apple's market share in China fell from 20% to 15%, positioning it behind Huawei, which has managed to increase its market share from 10% to 17% by shipping 11.7 million smartphones. Apple's decline was the most severe among the top five vendors, with the company selling only 10 million iPhones during this period.
Despite the downturn for Apple, the Chinese smartphone market itself is experiencing a rebound after years of decline. This recovery comes at a time when local Chinese brands are beginning to capitalize on generative AI technology, integrating it into their devices to enhance performance and user experience. Canalys forecasts that AI-capable smartphones will constitute 12% of all shipments in mainland China in 2024, surpassing the global average.
Lucas Zhong, a research analyst at Canalys, highlighted the potential for Chinese vendors to further challenge Apple in the high-end market segment, thanks to these AI advancements.
In February 2024, Apple reported a 13% year-over-year decrease in China sales, which still translated to substantial revenue of just over $20 billion from iPhone sales in the country. This situation illustrates the competitive pressures Apple faces in China, as local brands continue to innovate and gain market share.
The ongoing development of AI capabilities in smartphones could reshape the competitive landscape in China's smartphone market, presenting both challenges and opportunities for global brands like Apple.
