Key Points:
- Apple iPhone shipments in China grew 20% in Q1.
- Overall smartphone market in China declined by 4%.
- Huawei also grew 2%, maintaining the top spot.
- Rising memory chip prices affected most vendors.
Apple’s iPhone shipments in China saw a remarkable 20% increase during the first quarter, marking the strongest growth among major vendors. This surge occurred despite an overall decline in the smartphone market, which faced challenges from rising memory chip prices that pushed up production costs.
According to data from Counterpoint Research, total smartphone shipments in China, the world’s largest smartphone market, fell by 4% between January and March. Supply chain disruptions and the escalating costs of memory chips were key factors contributing to this overall market contraction.
However, China’s two leading smartphone vendors, telecoms giant Huawei and tech giant Apple, defied this negative trend. Huawei reported a 2% growth in shipments, while Apple’s impressive 20% surge stood out.
Ivan Lam, a senior analyst at Counterpoint Research, explained Apple’s success: “As most rivals raise prices, Apple stands out for value, with Chinese consumers knowing its products last at least three years.” This perception of long-term value appears to have resonated with consumers.
Huawei’s strong performance came from robust demand across both its high-end and more affordable ranges, including its popular Enjoy 90 series. This helped Huawei maintain its position as the top vendor with a 20% market share in the quarter, with Apple closely following at 19%.
Chinese smartphone makers generally raised prices for their budget handsets to protect profit margins, battling against the increased costs of memory chips. This strategy, however, impacted some brands negatively.
Xiaomi, for instance, dropped to sixth place, experiencing a sharp 35% decline in shipments. Lam attributed this significant fall to a high base effect from the previous year, when Xiaomi benefited from aggressive price cuts and government subsidies.
Other major players also saw dips, with Oppo’s shipments falling by 5% and Honor’s by 3%. In contrast, Vivo managed a 2% rise in shipments, boosted by strong sales during the Lunar New Year holiday period.
Lam anticipates more challenges for the market in the second quarter, especially as Chinese brands may need to implement further price increases. He expects Apple and Huawei to perform relatively better, with Huawei potentially seeing continued growth driven by solid demand for its more affordable devices.
