According to research from market research firm Canalys, Apple's decline in the Chinese market appears to be quite significant. While Apple had seen substantial sales growth in the previous quarter, it has now become clear that in Q1 2024, the company not only fell from the top position but plummeted all the way to fifth place. Furthermore, this decline is reportedly the largest ever on a quarterly basis.
Prior to this, Counterpoint Research had reported that Apple's iPhone shipments in China for Q1 2024 fell 19.1% year-over-year, but this time Canalys is claiming that sales declined even more sharply, by 25%.
Apple's decline was the worst among the top 5 vendors, with iPhone shipments falling 25% year-over-year to just 10 million units, causing its market share to drop from 20% to 15%. In contrast, Huawei, which took the top spot, shipped 11.7 million smartphones, a 70% increase year-over-year, boosting its share from 10% in Q1 2023 to 17%, propelling it to first place in one leap.
| Q1 2024 Shipments (millions) | Q1 2024 Market Share | Q1 2023 Shipments (millions) | Q1 2023 Market Share | Annual Growth | |
|---|---|---|---|---|---|
| Huawei | 11.7 | 17% | 6.8 | 10% | 70% |
| OPPO | 10.9 | 16% | 12.6 | 19% | -14% |
| HONOR | 10.6 | 16% | 9.7 | 14% | 9% |
| vivo | 10.3 | 15% | 11.3 | 17% | -9% |
| Apple | 10.0 | 15% | 13.3 | 20% | -25% |
| Others | 14.2 | 21% | 13.8 | 20% | 3% |
| Total | 67.7 | 100% | 67.6 | 100% | 0% |
Lucas Zhong, Research Analyst at Canalys, analyzes that one factor behind this is that Apple was undercut by generative AI:
"Generative AI-enabled smartphones offer a crucial opportunity for Chinese vendors to differentiate at the high end and challenge Apple in its domestic market in 2024. Canalys forecasts that generative AI-enabled smartphone shipments in Mainland China will reach 12% in 2024, exceeding the global average of 9%. Vendors are actively engaging consumers by developing compelling AI use cases and investing heavily in marketing to educate consumers, while incorporating AI capabilities into their latest flagship models."
However, according to Canalys' sales chart spanning Q3 2021 through Q1 2024, it is also true that the iPhone 15's peak sales volume was higher than that of the previous year's iPhone 14.
In February 2024, Apple reported that its sales in China had declined 13% year-over-year, yet iPhone sales in the country still exceeded $20 billion.
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