iPhone Sales In China Dip As Huawei Surges; Vivo Leads The Market

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Huawei's Surge Impacts iPhone: Vivo at 17.4 and Honor at 16.1 Lead China Sales

Apple's iPhone sales took a hit in China during the first quarter of 2024, according to a report from Counterpoint Research. The tech giant witnessed a 19.1 per cent year-over-year decline in iPhone sales in the first three months. This quarter, vivo took the lead with a 17.4 per cent market share, boosted by strong sales of the Y35 Plus, Y36, and S18 models. HONOR came in second with a 16.1 per cent share, while Apple followed closely with a 15.7 per cent share. Apple faced stiff competition from the domestic brand Huawei, as it experienced a surge of 69.7 per cent in smartphone sales.

The Shenzhen-based company saw a huge surge in smartphone sales which can be attributed to the launch of its Mate 60 smartphone series. Despite facing U.S. sanctions since 2019, Huawei has managed to make a comeback in the smartphone market, becoming the fourth-largest smartphone maker in China.

Huawei's comeback has directly impacted Apple's sales in the premium segment of the Chinese market. According to Ivan Lam, a senior research analyst at Counterpoint Research, "Apple's sales were subdued during the quarter as Huawei's comeback has directly impacted Apple in the premium segment." Additionally, Lam noted that replacement demand for iPhones has been slightly subdued compared to previous years.

While Apple's sales in China faced challenges during the first quarter, analysts suggest that the company could see a recovery in the coming months. Lam hinted at the possibility of new colour options for flagship iPhones, aggressive discounts, and the incorporation of new AI features expected to be unveiled at Apple's Worldwide Developers Conference in June.

AI Role In Upcoming Phones

Despite Apple's struggles, the overall smartphone market in China grew by 1.5 per cent year-over-year in the first quarter of 2024, marking the second consecutive quarter of positive growth. Counterpoint Research expects low single-digit year-over-year growth for China's smartphone market in 2024, with the integration of artificial intelligence (AI) features into Chinese smartphone makers' handsets.

Chinese device makers like Xiaomi, Oppo, and the Huawei spinoff Honor have already started integrating AI capabilities into their flagship smartphones. For instance, Honor showcased an AI-powered eye-tracking feature in its Magic 6 Pro smartphone, allowing users to control a car using their eyes.

Counterpoint Research suggests that Chinese smartphone firms will likely incorporate new AI advancements in their mid-price phones in the future, potentially driving renewed demand for new mobile devices.