According to market statistics, Apple suffered from Huawei’s new product introductions in the premium class, which caused the iPhone maker’s smartphone shipments in China to fall 19% in the first quarter of the year—the lowest level since 2020.

From 19.7% a year earlier, Apple’s share of the largest smartphone market in the world dropped to 15.7% in the first quarter. That nearly put it on par with Huawei, whose sales increased by 70%, according to research firm Counterpoint.

Rival Vivo overtook Apple as the country’s top smartphone seller, with Apple dropping to third place during the quarter. Huawei, on the other hand, saw a sharp increase in its market share, rising from 9.3% to 15.5% in the previous year. In second position was Honour, a mass-market brand that Huawei separated.

“Huawei’s comeback has directly impacted Apple in the premium segment. Besides, the replacement demand for Apple has been slightly subdued compared to previous years,” said Counterpoint analyst Ivan Lam in a press release.

“We are seeing a slow but steady improvement in weekly iPhone sales,” Lam continued, adding that “for the second quarter, the possibility of new colour options combined with aggressive sales initiatives could bring the brand back into positive territory.”

Approximately 17% of Apple’s total revenue was earned in China, the company’s third-largest market, during the October–December quarter.

Its decline in market share in China follows other data released earlier this month that revealed the American company’s global smartphone shipments fell by about 10% in the first quarter of 2024 due to growing competition from Android smartphone manufacturers, primarily Samsung Electronics.

In the first quarter, Samsung overtook Apple as the leading phone manufacturer.

Apple’s stock fell 0.4% in Tuesday’s premarket trading. This year, the stock has lost almost 14% of its value, and on Friday it reported its worst weekly performance in more than eight months.

Apple ran promotions in China throughout the first quarter of this year to lure customers with discounts. Some of these campaigns included up to 1,300 yuan ($180) in subsidies for specific iPhone models.

After releasing the Mate 60 series in August, Huawei unveiled the Pura 70 series of high-end phones last week. Because the Mate 60 phones use a cutting-edge chip built in China, it was hailed as a victory over the U.S. sanctions against the company and as a return for the Chinese company in the high-end market.

The processor that powers Huawei’s flagship phone is not as sophisticated as American chips, according to U.S. Commerce Secretary Gina Raimondo, who said on Sunday that this proves the country’s restrictions on exports to the massive supplier of telecom equipment are effective.

The Pura 70 series is expected to be among the 10 million units shipped in China this year, according to research firm TechInsights, based in Canada. With a 19% market share, Huawei would become the top vendor, up from 12% in 2023.

According to Counterpoint, the first quarter saw a 1.5% gain in the Chinese smartphone market, which is the second consecutive quarter of positive growth.

(Adapted from Business-Standard.com)