Apple Falls Out of Top 5 Smartphone Vendors in China as Domestic Brands Lead Market

Apple has been edged out of the top five smartphone vendors in China for the first time in history, according to a Canalys report released on Thursday. The company’s market share in China fell to 14% in the second quarter, down from 15% in the first quarter and 16% a year ago.
In the same period last year, Apple was the third-largest smartphone vendor, but it has now dropped to sixth place, with approximately 9.7 million shipments, as calculated by CNBC.
Lucas Zhong, a research analyst at Canalys, noted, “This is the first quarter where domestic vendors hold all top five positions.” The decline in Apple’s shipments began in the first quarter, with a 25% year-on-year drop to 10 million units.
Zhong explained that Chinese vendors are increasingly benefiting from their strategies for high-end products and strong collaboration with local supply chains. For instance, Honor’s new Magic V3, featuring generative AI, has notably improved the user experience of foldable devices.
In contrast, Apple faces challenges in the Chinese market, particularly with stabilizing retail prices and maintaining channel partner margins. Looking ahead, Canalys suggests that Apple will need to focus on localizing its intelligence services in China, as Chinese brands aggressively integrate generative AI into their products.