Apple was dethroned as China’s biggest smartphone seller in 2024, with domestic rivals Vivo and Huawei overtaking the iPhone maker as its annual shipments in the country fell 17%, data from research firm Canalys showed on Thursday. .
That was the biggest annual decline in Apple’s annual sales in China and included contractions in all four quarters, including a 25% drop in the latest quarter, according to the data.
Apple shares fell 4% on Thursday.
For the full year, budget smartphone maker Vivo captured a 17% market share in China, followed by premium rival Huawei at 16% and Apple at 15%, demonstrating the increasing sales pressure it faces from domestic manufacturers in one of the largest global markets.
The decline also shows how factors such as the lack of artificial intelligence capabilities in the latest iPhones sold in China, where ChatGPT is not available, are affecting Apple’s competitiveness.
“This marks Apple’s worst annual performance in China,” said Canalys analyst Toby Zhu.
“Apple’s premium position in the market faces numerous challenges: the constant releases of Huawei’s flagship, the proliferation of domestic foldable phones in high-priced segments, and Android brands such as Xiaomi and Vivo, building consumer loyalty through technological innovations, he said.
Apple had previously enjoyed four years of steady growth after US sanctions placed Huawei on an entity list in 2019, limiting its access to US technology.
But Huawei has made a strong comeback in the premium segment since August 2023, when it launched new phones with home-made chips. The Chinese company posted a 24% increase in shipments in the fourth quarter.
Apple did not immediately respond to a request for comment.
The iPhone maker has returned to rare discounts to stimulate sales. The company launched a four-day promotion in China from January 4-7, offering discounts of up to 500 yuan ($68.50) on its iPhone 16 models through its official channels.
Major Chinese e-commerce platforms have followed suit with their own promotions. Alibaba’s Tmall marketplace announced discounts of up to 1,000 yuan ($137) on the latest iPhone 16 series devices.
Among the top five vendors, budget-focused Xiaomi posted the strongest growth with a 29% rise in fourth-quarter shipments, while Oppo and Vivo posted gains of 18% and 14% respectively, according to Canalys data.
Annual smartphone shipments in China in 2024 rose 4% year-on-year to 285 million units.
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