Sales of foreign-branded mobile phones in China, including Apple’s iPhones, increased slightly in April, according to data from the China Academy of Information and Communications Technology (CAICT).

Shipments rose to 3.52 million units, up from 3.5 million in April of the previous year.

Apple, the largest foreign mobile phone maker in China, has faced increasing competition from domestic manufacturers.

The company has offered discounts on its latest iPhone 16 models on Chinese e-commerce platforms, with reductions reaching up to 2,530 yuan (US$351).

This increase in April follows a 9% decline in Apple’s phone sales in China earlier this year.

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🔗 Source: Reuters

🧠 Food for thought

1️⃣ Apple’s price cuts reflect shifting competition dynamics in China

Apple’s discounting strategy marks a significant shift from its historical premium positioning in China’s smartphone market, where iPhones were once viewed as luxury status symbols comparable to Gucci and Louis Vuitton 1.

The current discounts of up to 2,530 yuan ($351) on iPhone 16 models represent Apple’s response to intensifying competition from domestic brands that offer comparable features at lower prices.

This pressure has been building for years, as evidenced by Apple’s market share fluctuations. In 2015, Apple’s share grew to 13.4% despite maintaining prices three times higher than competitors 1, but by Q1 2025, Apple had fallen to fifth place with an 8% year-on-year decline 2.

Chinese brands have steadily eroded Apple’s premium advantage through aggressive innovation, with companies like Huawei capturing 19.4% market share in Q1 2025 through strong demand for its flagship models 3.

The latest sales uptick (3.52 million units from 3.50 million) suggests Apple’s price adjustments may be working as a short-term strategy, but the previous quarter’s 9% drop indicates the company faces structural challenges in maintaining its market position.

2️⃣ Chinese consumer behavior reveals deeper shifts in smartphone value perception

The marginal growth in foreign-branded phones masks a fundamental shift in how Chinese consumers evaluate smartphone value, with the ecosystem advantage Apple traditionally enjoyed becoming less relevant.

WeChat’s dominance in China means the operating system is no longer a significant differentiator, making it easier for consumers to switch between iOS and Android devices without losing essential functionality 4.

This ecosystem shift has contributed to iPhone users in China having notably lower retention rates compared to other markets, reflecting decreased brand loyalty 4.

Chinese government subsidy programs launched in January 2025 for smartphones priced below CNY 6,000 ($820) have primarily benefited domestic manufacturers, as most Apple products exceed this threshold 2.

The data shows Chinese consumers increasingly prioritize technical specifications and price-performance ratio over brand prestige, with the iPhone 16 Pro Max maintaining just 4% market share despite being the most popular single model 5.

3️⃣ The evolving competitive landscape reflects China’s maturing smartphone market

China’s smartphone market has evolved dramatically from the rapid growth period of 2014 (20% growth) to today’s more moderate expansion (2.5% growth in Q1 2025), indicating a maturing market where competition centers on taking share rather than capturing new users 3.

Chinese manufacturers now dominate at least 80% of their home market, with Xiaomi, Huawei, OPPO, and vivo consistently occupying the top positions through aggressive pricing strategies and feature innovation 5.

The shift is particularly evident in premium segments where Apple once dominated. Chinese brands have successfully moved upmarket while maintaining price advantages, with Huawei achieving its highest market share (19.4%) since 2021 3.

Apple’s strategy of maintaining high margins through premium pricing appears increasingly challenged in China, where competitors have successfully implemented value-based pricing models that align costs with consumer perceptions while optimizing profits 6.

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