Apple’s iPhone sales make up half of China’s high-end smartphone market in second quarter, solidifying US firm’s lead

Strong iPhone 13 sales helped Apple take up 46 per cent of China’s market for smartphones that cost more than US$400
Vivo jumped to second place for the first time as rivals try to fill hole left by Huawei in wake of US sanctions

Apple

Iris Dengin Shenzhen

Published: 2:00pm, 25 Aug, 2022

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Apple’s iPhones made up half of all smartphones sold for more than US$400 in China in the second quarter, solidifying the US tech giants’s lead as the top premium handset vendor in the country, as domestic brands vie to replace Huawei Technologies Co.

Strong iPhone 13 sales helped Apple take 46 per cent of China’s premium smartphone segment for the second quarter, according to a report from Counterpoint Research released on Wednesday. Its market share is up from 43 per cent in the same period last year.

In the ultra high-end segment, defined as smartphones priced at US$1,000 or higher, iPhone sales jumped 147 per cent year on year. Samsung Electronics has also enjoyed rapid growth, with sales rising 133 per cent in the same category for the period, according to the report.

“Both [Apple and Samsung] benefited from Huawei’s decline and the shift in purchase trends towards premium phones in China,” Counterpoint analyst Zhang Mengmeng said in the report.

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Apple, which is expected to launch the iPhone 14 on September 7 in the US, has maintained a strong grip on China’s smartphone market amid challenges faced by local rivals. Most notably, Huawei has struggled to sell new models launched since coming under US sanctions in 2019.

Huawei dropped to third place with 11 per cent market share for the quarter, down from 19 per cent a year earlier. Huawei, formerly China’s largest smartphone vendor, has seen its once lucrative smartphone business decimated since Washington added the telecoms equipment maker to a trade blacklist.

This has left a gap in the market that domestic rivals have been competing to fill.

“Apple and Huawei have been competing for the first and second spots for a long time. But now other major Chinese [manufacturers] have started targeting the premium segment,” said Counterpoint analyst Ivan Lam.

Dongguan-based Vivo jumped to second place for the first time, taking 13 per cent of the premium handset market. Honor, which Huawei sold off in 2020, moved up to fourth place from sixth, with 9 per cent market share.

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However, opportunities in the market are also declining. Premium smartphone sales in China fell 10 per cent year on year in the second quarter. The handset market as a whole fell 14 per cent, its steepest decline in nearly a decade.

China’s smartphone market has been battered by a slowing economy and disruptions in supply chains, which have been exacerbated by the country’s strict Covid-19 control policies. Some areas, including Shanghai and the surrounding regional manufacturing hub of the Yangtze River Delta, were under partial lockdowns in the second quarter in an effort to contain the spread of the Omicron variant.

“Lockdowns in key Chinese cities impacted premium segment sales because customers for this segment are mostly based in these cities,” Zhang said.