Huawei and Xiaomi push Apple to third place in Chinese smartphone market

This is the first time since the United States imposed sanctions on Huawei in 2019 that the Chinese tech giant has surpassed Apple in its home market

Apple, once a dominant force in China's smartphone market, is facing a significant setback. According to the latest report from Counterpoint Research, the company's market share in China plummeted to 17% in the final quarter of 2024, down from 19% in the same period last year. This decline has pushed Apple from its top position to third place, marking a turning point in a market that has historically been one of the company’s most lucrative.

Huawei's resurgence: Shifting the balance in China

Huawei has reclaimed the number one spot in China's smartphone market, securing an 18.1% share. Xiaomi follows closely behind with 17.2%, leaving Apple in an uncharacteristic third place. This is the first time since the United States imposed sanctions on Huawei in 2019 that the Chinese tech giant has surpassed Apple in its home market.

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Huawei’s resurgence is largely attributed to its focus on innovation and its ability to adapt to local demands. The brand’s latest releases emphasize advanced artificial intelligence (AI) features, which have struck a chord with Chinese consumers. By contrast, Apple has faced challenges in deploying similar capabilities within China due to regulatory restrictions. The Cupertino-based company is reportedly working with local partners to address these issues, but implementation could take months or even years.

In addition to Apple’s struggles, the overall Chinese smartphone market has also contracted, with a 3.2% decline in sales during the last quarter of 2024. Economic pressures, changing consumer behaviour, and increased competition from domestic brands have collectively contributed to the downturn.

Despite the drop, Apple’s position in China remains significant, particularly among premium smartphone users. However, analysts believe the company will need to double down on localization efforts and accelerate the introduction of new features tailored to Chinese preferences to maintain its competitive edge.

The report highlights a broader trend: local brands like Huawei and Xiaomi are increasingly dominating the Chinese market by offering cutting-edge features at competitive prices. As the global smartphone industry continues to evolve, Apple’s ability to navigate these challenges will determine whether it can reclaim its leadership position in one of the world’s most dynamic markets.

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