Apple Inc. (AAPL) experienced a significant setback in China, with iPhone sales plunging 18.2% during the December quarter, according to independent research. This decline marks a substantial blow for the company in its largest market after the United States. Once the dominant force in the region, Apple’s flagship iPhones were dethroned by Huawei Technologies Co., which regained the top spot, as revealed by Counterpoint Research. As a result, Apple fell to third place in the world’s largest smartphone market, holding just about 16% of the share during the three-month period.
The drop in China played a key role in a global 5% dip in iPhone sales during the critical holiday shopping season. Despite the introduction of the new generation of iPhones—featuring significant artificial intelligence (AI) upgrades—the debut was marked by uneven performance. Initially, the devices saw strong sales in China but ultimately lost momentum. A major factor behind this was the limited availability of AI features, as Apple has yet to secure a local partner to provide the necessary on-device and cloud-based AI infrastructure. The company is in discussions with several major Chinese tech firms, including Baidu Inc. and Tencent Holdings Ltd., as well as emerging startups like Zhipu AI, but no agreements have been reached.
“This marks the first time since the U.S. ban that Huawei has regained its position at the top,” stated Mengmeng Zhang, an analyst at Counterpoint Research. Huawei’s resurgence, driven by a 15.5% year-on-year sales increase, was fueled by the release of its Nova 13 and high-end Mate 70 series smartphones. The Mate 70 line, which debuted during this period, is significant because it offers users the option to rely entirely on Huawei’s HarmonyOS Next operating system, which is free of U.S. technology. Powered by domestically produced chips, the Mate 70 represents a further push by Huawei to regain market share in the premium smartphone segment within China, following the success of its Mate 60 series last year.
The broader Chinese smartphone market itself also faced challenges, registering its first decline in sales in the final quarter of 2024, following a period of recovery earlier in the year.
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