Apple Sales Rebound in China, Huawei Loses Top Spot

Shifting Dynamics in the Chinese Smartphone Market

Chinese smartphone manufacturers are rapidly redistributing the market share previously held by Huawei over the last twelve months.

Q1 Smartphone Shipments in China

During the first quarter, a total of 92.4 million smartphone units were shipped throughout China. Vivo emerged as the leading vendor, capturing 23% of the market.

Its affiliated company, Oppo, secured the second position with a 22% share, as reported by the market research firm Canalys.

Huawei, whose sales were negatively impacted by U.S. sanctions restricting access to essential chip components, ranked third with a 16% market share.

Xiaomi and Apple followed, claiming the fourth and fifth positions, respectively.

Market Share Gains for Most Brands

With the exception of Huawei, all major smartphone brands experienced an increase in their market share within China compared to the first quarter of 2020.

Apple’s net sales in Greater China nearly doubled year-over-year, reaching $17.7 billion for the quarter ending in March. This represents a quarterly record for the American technology company.

Apple's Performance and China's Recovery

“The customer reception to the iPhone 12 series in China has been particularly encouraging,” stated Tim Cook during a recent earnings conference call.

“It’s important to note that China’s initial shutdown period occurred earlier in Q2 of the previous year than in other regions. Consequently, the country was comparatively more affected during that quarter, a factor that must be considered when analyzing the current results.”

Huawei's Decline and Strategic Adjustments

Huawei’s market share has significantly decreased from a dominant 41% to 16% over the past year.

However, the company has managed to improve its profit margin, partly through cost reduction measures. In November, it completed the sale of its budget smartphone brand, Honor.

Market Growth and Increased Competition

This quarter marks the first instance of growth in China’s smartphone market in four years, exhibiting a 27% growth rate, according to Canalys.

“Top vendors are aggressively competing for market leadership, and the number of smartphone launches this quarter was notably higher than in Q1 2020 or Q4 2020,” explained Canalys analyst Amber Liu.

“The sanctions imposed on Huawei and the divestiture of Honor have been pivotal in driving this new market expansion, as both consumers and distribution channels demonstrate increased openness to alternative brands.”