What’s behind Apple’s strong iPhone growth in China market?
Apple recorded a robust 20% increase in iPhone shipments in China during the first quarter, outperforming the wider market, as per Counterpoint Research data, cited in a Reuters report.
The company’s performance stood in contrast to a slowdown across the sector, as rising memory chip prices and supply chain disruptions weighed on total smartphone shipments in the country.
Overall market declines amid rising costs
Despite Apple’s strong performance, the overall smartphone market in China shrank during the quarter.
Total shipments dropped 4% in the world’s largest smartphone market.
The decline was attributed to supply chain disruptions and rising memory chip prices, which increased production costs for manufacturers.
These higher costs have also forced many vendors to raise prices, particularly in the budget segment, in an effort to protect margins.
Apple gains edge on value proposition
Apple’s growth stood out in a challenging market environment.
Ivan Lam, senior analyst at Counterpoint Research, highlighted the company’s perceived value among consumers.
“As most rivals raise prices, Apple stands out for value, with Chinese consumers knowing its products last at least three years,” Lam said, as cited in a Reuters report.
This perception of durability appears to have helped Apple attract buyers even as overall demand softened.
Huawei retains market leadership
Huawei continued to lead the Chinese smartphone market during the quarter, supported by strong demand across both premium and budget segments.
Huawei recorded a 2% increase in shipments and secured a 20% market share, maintaining its top position.
Apple followed closely with a 19% share after its strong growth.
Lam noted that Huawei’s performance was driven by solid demand for its product lineup, including devices in the lower-end segment such as the Enjoy 90 series.
Mixed performance among other vendors
The broader competitive landscape showed mixed results for other smartphone makers in China.
Xiaomi saw a sharp decline, with shipments plunging 35%.
Lam attributed this drop to a high base effect, as the company had previously benefited from aggressive price cuts and government subsidies in the same period last year.
Shipments from Oppo and Honor also fell by 5% and 3%, respectively.
In contrast, Vivo posted modest growth of 2%, supported by strong sales during the Lunar New Year holiday.
Price pressures
Smartphone vendors across China have increasingly raised prices for budget devices to offset the impact of elevated memory chip costs.
This trend is expected to continue, adding further pressure on demand.
Looking ahead, Lam warned of additional challenges for the market in the coming quarter.
China pushes domestic chip expansion
Meanwhile, China is planning to significantly expand its domestic semiconductor production capacity.
Yangtze Memory Technologies is preparing to build two additional factories alongside a third facility nearing completion, a move that could more than double its output.
The expansion comes as China seeks to reduce reliance on foreign chip technology amid tightening US restrictions.
A cross-party group of US lawmakers has also proposed stricter export controls on chipmaking equipment destined for China, highlighting the geopolitical tensions surrounding the sector.
Each of the three new plants is expected to produce 100,000 wafers per month at full capacity, compared with the company’s current combined output of 200,000 wafers per month from two existing facilities.
The third factory in Wuhan is expected to begin operations later this year and could reach a capacity of 50,000 wafers per month by 2027.
The developments suggest that while near-term pressures from rising chip costs continue to weigh on smartphone demand, China’s push to boost local semiconductor production could play a key role in shaping the market’s long-term supply dynamics.
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