Apple Inc. (AAPL) saw its smartphone sales in China decline by a modest 0.3% year-over-year in the third quarter. Despite this slight dip, the demand for the iPhone 16 series, launched in September, remained robust, holding steady compared to previous generations, according to the IDC report. This steady performance played a crucial role in helping Apple reclaim its No. 2 position in China’s smartphone market, capturing a 15.6% market share.
Vivo led the Chinese smartphone market with an impressive 18.6% share, fueled by a 21.5% surge in shipments. But in a remarkable comeback, Huawei Technologies Co. witnessed a significant 42% growth in shipments, allowing them to secure 15.3% of the market. This impressive performance comes after four consecutive quarters of double-digit growth, showcasing Huawei’s strong resurgence in the market.
The success of Huawei’s premium segment can be attributed to its advanced, China-made processor, which has garnered significant patriotic support amidst the ongoing geopolitical tensions with the United States.
Xiaomi Corp (XIACF, XIACY) also displayed strong performance, claiming the fourth spot with a 14.8% market share. Their shipments saw a 12.8% increase, driven by a strategic focus on both budget-friendly and high-end segments. Honor, the former Huawei sub-brand, secured the fifth position with a 14.6% share, although its shipments declined by 22.5% during the quarter.
The overall Chinese smartphone market, which is the world’s largest, experienced a 3.2% year-over-year growth in the third quarter, reaching 68.8 million units. This marks the fourth consecutive quarter of growth, indicating a positive recovery trend in the market.
IDC analyst Arthur Guo attributed this growth to a “significant wave of device upgrades” driving China’s smartphone recovery. This growth coincides with China’s stimulus plans and the upcoming holiday season, further contributing to the positive market sentiment.
Apple implemented notable promotional strategies for the iPhone 16 in China, offering pre-release discounts on platforms like PDD Holdings Inc. (PDD) Pinduoduo and Alibaba Group Holding (BABA) Taobao. Leading up to Singles’ Day, Apple further reduced prices to attract a larger customer base.
Recently, Apple CEO Tim Cook met with Jin Zhuanglong, China’s Minister for Industry and Information Technology. The Minister reportedly expressed his hopes for Apple to expand its presence in China and collaborate with local firms. This marks Cook’s second visit to China in 2024, demonstrating Apple’s commitment to the Chinese market. During his visit, Cook explored an organic farm and historic neighborhoods, showcasing his interest in understanding the cultural landscape of China.
Needham analyst Laura Martin anticipates that iPhone sales will contribute between 89% and 96% of Apple’s revenue in 2025. Apple’s stock has experienced a significant 35% growth in the past 12 months. Investors seeking exposure to Apple stock can consider the iShares Global Tech ETF (IXN) and Vanguard Information Tech ETF (VGT).
Apple’s stock (AAPL) closed at $232.52 on Friday, up 0.85%.
