According to a report by research firm CINNO, Huawei has overtaken Apple in smartphone sales in China for the first time in 46 months. The win marks a significant moment for the Shenzhen-based company, which has faced tough sanctions from the United States but is making a comeback thanks to the 5G devices it launched last year.
This finding is in line with data from the China Academy of Information and Communication Technology (CAICT), which revealed that overseas smartphone shipments, including Apple’s iPhone, decreased by 12.7% year-on-year. Overseas smartphone shipments in August were 1.87 million units, down from 2.14 million units in the same period last year. Meanwhile, domestic smartphone shipments, including those from Huawei, increased by 26.7% to 24.05 million units during the same period.
Huawei’s device business revival
Competition between Huawei and Apple in China, the world’s largest smartphone market, has reached new heights. Huawei’s success comes as Apple faces challenges on the mainland, with Huawei managing to revive its mobile phone business despite US sanctions. Strong demand for Huawei’s high-end smartphones, including the Mate and Pura series, and foldable devices, such as the Mate XT, significantly boosted the company’s results.
Research firm TechInsights reported that Huawei’s high-end models drove average selling prices and wholesale revenue to record levels in the second quarter. China remains Huawei’s most important market, accounting for 89% of global smartphone shipments.
China’s smartphone market is also gaining momentum, with more consumers choosing local brands such as Huawei. In the first half of this year, Huawei led the market with a 17.5% share. According to data from global market intelligence firm IDC, total smartphone shipments in the country exceeded 140 million units, recording a year-on-year growth of 7.7%.
Apple’s China market share shrinking
Apple’s recent struggles in China have not gone unnoticed. The launch of Huawei’s Mate XT 5G smartphone coincided with the launch of Apple’s iPhone 16 series, which debuted in nearly 60 countries on the same day. However, despite global excitement over the new iPhone, Apple dropped out of the top five of China’s smartphone vendor rankings in the second quarter. According to IDC, Apple’s market share in the mainland has fallen to less than 14%.
Apple’s sales in Greater China, which includes mainland China, Hong Kong and Taiwan, reached US$14.73 billion in the June quarter, down 6.5% year-on-year. TF International Securities analyst Kuo Ming-Chi said Apple’s iPhone assembly orders remain stable. Nevertheless, Apple’s performance in China faces challenges, particularly with the new Apple Intelligence system, which won’t be available in Chinese until next year.
Outlook for Apple’s new iPhone
Apple CEO Tim Cook remains confident in the company’s long-term prospects in China, but there are immediate concerns about demand for the iPhone 16 series. Analysts including Kuo are paying close attention to how the launch of Apple Intelligence, the company’s on-device AI system, later this year will impact demand in the U.S. market. Kuo maintains his estimate that Apple will produce 88 million to 89 million iPhone 16 units in the fourth quarter of 2024.
As Huawei continues its comeback in China’s highly competitive smartphone market, all eyes will be on how Apple adjusts its strategy to maintain its presence in the country.
