Apple Inc.'s AAPL troubles in China continue, with the iPhone maker witnessing a decline in its market share in China, dropping from third place to sixth in the country, while Huawei Technologies has seen a significant increase in smartphone shipments, as per the latest data.
What Happened: Apple’s market share in China dropped to 14% in Q2 2024, a decrease of two percentage points from the same period last year, according to data from Canalys, reported Reuters.
Conversely, Huawei experienced a 41% year-on-year increase in smartphone shipments in the same quarter, largely attributed to the launch of its new Pura 70 series in April.
This growth comes amid U.S. sanctions that have disrupted Huawei’s access to the global chipset supply chain.
Lucas Zhong, a research analyst at Canalys, stated, “Domestic manufacturers have demonstrated market leadership, occupying the top five positions in the mainland Chinese market for the first time in history.”
He also noted that Apple is under growth pressure in the Chinese market and is actively focusing on optimizing channel management.
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Why It Matters: Apple's decline in China comes after a series of events that have impacted the iPhone maker's market position in China.
In April, Telegram Messenger founder Pavel Durov criticized Apple’s strict App Store policies, suggesting that they could lead to a further decline in iPhone market share in China.
In May, Apple CEO Tim Cook acknowledged the challenges faced by the company in China, attributing underwhelming quarterly results to a drop in demand in the country and fierce competition from Huawei.
Later in June, Apple sought a local partner in China to integrate artificial intelligence (AI) functions into its devices sold in the region.
Despite these challenges, Apple has increased its discounting efforts this year, launching an aggressive campaign in May with price cuts of up to $318 on select iPhone models.
However, analysts expect Huawei’s strong performance to continue throughout the year, with TechInsights projecting that Huawei’s overall smartphone shipments in China will exceed 50 million units in 2024.
Price Action: Apple’s shares were down 0.70% in premarket trading on Thursday, after closing 2.88% lower on Wednesday at $218.54, according to Benzinga Pro.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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