iPhone Loses Market Share Dominance in China, Report Says

Apple’s iPhone lost its top spot among Chinese smartphones, according to a Jefferies analyst note originally reported by CNBC. A lackluster release of the iPhone 15 allowed Huawei to replace the iPhone as the number one spot for market share.

Apple expected the most expensive iPhone 15 to be a top seller, however, Jefferies analysts see a double-digit decline in sales for the phone this year. Volume growth for the iPhone has been negative since the launch of the latest model. Initial reports previously showed that Apple cut production of the iPhone 15 by 8 million units leading up to its official announcement date.

Apple didn’t immediately respond to a request for comment.

Meanwhile, Huawei phone sales in China experienced high double-digit growth in 2023, outpacing Apple amidst a slowdown in smartphone sales for the region.

“The trend suggests iPhone would lose to Huawei in 2024,” wrote Jefferies analysts. “We believe weak demand in China would eventually lead to lower-than-expected global shipments of iPhone.”

Huawei launched the Mate 60 Pro, its latest high-end smartphone with a made-in-China processor. While the 7-nanometer processor is not as advanced as Apple’s 3-nanometer, Huawei’s technology development represents a significant advancement in the US-China chip war.

Counterpoint Research also saw a decline in sales for iPhones in China, blaming an economy struggling to rebound from a COVID slump. However, Counterpoint analysts say Huawei could sell 5 to 6 million units of the Mate 60 Pro alone this year, and that could rise above 10 million units in 2024.

US and China relations underwrite the smartphone war. Just last month, Chinese officials banned government employees from using iPhones at work, one week before Apple unveiled the iPhone 15. China has vowed to cut reliance on foreign technologies, and doing so could hurt Apple’s market capitalization in Asia. The ban on iPhones reflects similar United States policies, such as the Federal Communications Commission designating Huawei a national security risk.