For years, Apple has dominated the flagship smartphone market in China. However, the glory days of the iPhone in China have been declining since last year.
The iPhone is no longer considered as attractive as it once was. During the first six weeks of this year, which is the peak season for consumers in China to buy new smartphones, iPhone sales dropped by 24% from the previous year.
Meanwhile, according to Counterpoint Research, sales of one of Apple's rivals in China, Huawei, surged by 64%.
This has become a challenging time for Apple. Analysts say that their latest product, a $3,500 virtual reality headset released in February, still needs several years to gain mainstream customer appeal.
For a decade, China has been the most important market for the iPhone after the United States, accounting for about 20% of Apple's sales.
Now, the company's grip on China could be threatened by a series of factors, such as slowing consumer spending, increasing pressure from Beijing for people to avoid devices made by American companies, and tough competition from local players like Huawei and Xiaomi.
Without a significant reduction in geopolitical pressure, it will be difficult for Apple to maintain its position.
"Apple's golden age in China has come to an end," said Linda Sui, senior director at TechInsights, as quoted by The Economic Times on Thursday (March 28, 2024).
"One of the biggest reasons is the increasing tension between the US and China over trade and technology," she added.
Furthermore, Apple has to deal with legal issues due to violations of rules in several countries. In the European Union, Apple received a fine of $2 billion for anti-competitive music streaming practices, and the US government lawsuit claiming Apple violated Antitrust laws.
Overall, the Chinese smartphone market is divided among several companies. Domestic brands like Vivo, Oppo, and Xiaomi compete with Apple and Huawei to gain the largest market share.
Apple began selling iPhones in China in 2009. The last time Apple was surpassed by Huawei was in 2019, when the Trump administration inadvertently extended Apple's lifespan by restricting US tech companies from transacting with Huawei.
Google, the maker of the Android operating system, and several semiconductor companies ceased their support for the Chinese smartphone maker.
However, the US restrictions forced Huawei to develop its wireless chips and operating systems, resulting in the technology behind the Mate 60 Pro.
This operating system has become an attraction for buyers in China, and many major technology companies there have developed specific applications for the operating system, further limiting users from platforms used abroad.