On Thursday, July 25, according to data from market research firm Canalys, in the second quarter of 2024, iPhone shipments in mainland China decreased by 6.7% due to intense competition from local competitors, further highlighting the challenges Apple faces in China.
Canalys data shows that in the second quarter ending in June, total iPhone shipments in China were 9.7 million units, compared to 10.4 million units in the same period last year. Apple’s market share was 14%, a 2% decrease from the second quarter of last year, ranking sixth.
In the Chinese market, domestic suppliers dominated the top five in terms of smartphone shipments in the second quarter. Canalys stated that the mainland mobile phone market relies heavily on suppliers to drive sales, with suppliers leveraging national sales events such as “618” for promotion. Additionally, smartphone suppliers collaborated with e-commerce platforms to initiate promotional cycles with significant discounts and offers, starting earlier this year than before.
Canalys press release indicates that Apple’s sales in mainland China are facing bottlenecks. The current channel strategy of the supplier is to maintain healthy inventory levels, aiming to stabilize retail prices and protect the profit of channel partners.
Canalys research analyst Lucas Zhong stated: “Apple is under pressure for growth in the Chinese market and is actively focusing on optimizing channel management.”
Due to the ongoing real estate crisis, the Chinese Communist Party’s crackdown on private enterprises, tightening regulation of foreign companies, leading to a large outflow of foreign capital, the Chinese economy is struggling to recover, domestic demand is weak, and consumers are tightening their wallets. In order to increase sales, Apple has also increased discounts in the Chinese market this year to attract consumers. In May, Apple launched an aggressive promotional campaign in China, twice the size of the February promotional activities, with some iPhone models discounted by up to 2,300 yuan ($318.84).
The crackdown by the Chinese government, along with competition from local smartphones, is also one of the main reasons for the decline in iPhone shipments in China. In September last year, US media quoted sources reporting that the Chinese Communist Party expanded the ban on iPhone use to government-supported institutions and state-owned enterprises, with some Chinese institutions instructing employees not to bring iPhones to work. In December last year, sources disclosed to overseas media that in the past few months, multiple government departments and state-owned enterprises in at least eight provinces have instructed employees to start using domestic brands of smartphones.
(Reference to Reuters’ report)