Huawei Technologies Co., Ltd. has made headlines by reclaiming its status as one of China's leading smartphone manufacturers, overtaking Apple Inc. and trailing closely behind domestic rivals like Vivo and Xiaomi. According to data from Canalys, Huawei captured 16% of the market share, positioning itself firmly among local competitors.
Apple's decline has been stark, facing its largest-ever sales drop of 17% across all quarters of 2024. The final quarter saw the biggest hit, with sales plummeting by 25%. This downturn marks Apple’s worst annual performance in China, and it raises questions about the company's future in this major market.
“This marks Apple’s worst annual performance in China,” said Canalys analyst Toby Zhu. He asserted, “Apple’s premium market position faces multiple challenges: Huawei’s continuous flagship releases, the proliferation of domestic foldable phones, and Android brands like Xiaomi and Vivo building consumer loyalty through technological innovations.” This sentiment highlights the dynamic and rapidly changing competitive smartphone environment, particularly as local Chinese brands adopt innovative technologies.
The appetite for budget smartphones remains strong with Vivo leading the way at 17% market share, but Huawei’s comeback is particularly noteworthy. After being constrained by U.S. sanctions starting back in 2019, which severely limited its access to American technology, Huawei has made significant strides since launching its new phones with locally produced chipsets. For example, the Huawei Mate 70 RS Ultimate was launched on November 26, 2024, showcasing impressive specifications such as the Kirin 9020 processor and cutting-edge camera capabilities.
Sales figures for the fourth quarter revealed Huawei’s shipments surged by 24%. While Apple has relied on strategic discounts to stimulate demand—offering price cuts up to 1,000 yuan ($137) for its iPhone 16 models—Huawei’s engaging features and marketing strategies appear to resonate more effectively with Chinese consumers this year.
Alongside these dynamics, Chinese e-commerce platforms have rallied to support competition. For example, on platforms like Alibaba’s Tmall, special promotions and aggressive pricing strategies were rolled out, giving consumers substantial discounts.
Huawei continues to innovate, with the Mate 70 RS Ultimate featuring high-end specs like its triple camera setup (50 MP + 48 MP + 40 MP) and 5700mAh battery. This model boasts of standout attributes, including extensive storage options of up to 1TB and support for fast and wireless charging as well as running on the proprietary HarmonyOS 4.3.
The competitive atmosphere of the smartphone market remains fierce with various companies striving to differentiate themselves through technology. Vivo, another main competitor, has maintained growth, obtaining 17% of the market, whereas Apple is seen as having lost its previous foothold.
Further statistics show how major players like Xiaomi experienced great success, posting the highest growth rate of 29% during the same period.
While some might argue Apple can recover by introducing new features or enhancing its user experience, the reality is its ability to compete effectively against local brands like Huawei and Vivo is currently hindered by market perceptions and shifting consumer preferences.
The consumer market's reaction to these developments will be telling, and how major players like Apple respond could redefine their prospects as they navigate this challenging environment. There’s little doubt consumers are now more attuned to local brands and the innovative capabilities they bring to the table. With Huawei back on track and pulling releases such as the new Mate 70 RS Ultimate, this twist could signify the dawn of new loyal customer relationships grounded more deeply within domestic horizons.