iPhone sales in China have dropped sharply—can the 17 series reverse the downward trend?

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In the weeks leading up to the launch of the iPhone 17, Apple’s smartphone sales in China fell 6% year-on-year, a decline greater than typically seen before the launch of a new flagship product. This highlights the intense competition in the world's largest smartphone market and the challenges Apple faces in regaining its leading market position.

On Wednesday, according to Counterpoint Research data, during the first eight weeks of the third quarter this year (covering July and August), Apple’s smartphone sales in the Chinese market fell 6% year-on-year.

Apple CEO Tim Cook previously stated that the company reversed two years of consecutive sales declines in China in the second quarter, partly thanks to government subsidies. However, the latest data shows that Apple still needs to work hard to catch up with competitors in China, currently ranking sixth with just a 12% market share.

The iPhone 17, regarded as Apple’s most significant upgrade in years, will go on sale globally this Friday, equipped with a brand new design and upgraded camera system. In response to Apple’s new release, Xiaomi has moved up the launch of its next flagship phone to this month.

Apple’s Weakness in China Market, Competitors Take the Lead

Although Apple saw a sales rebound in China in the second quarter, it remains behind its main competitors in terms of market share. According to Counterpoint data, Apple now ranks sixth with a 12% market share, while Xiaomi, OPPO, and Huawei each hold 16%. Leading the pack is Vivo with a 19% share.

Cook noted on the latest earnings call that iPhone’s customer base in Greater China hit a record high in the second quarter, helping drive consumers to purchase other Apple products. He pointed out that if you look at other products—Mac, iPad, and Watch—the majority of customers in mainland China are new users for that product.

The iPhone 17, which will go on sale globally this Friday, is seen as Apple’s most significant upgrade to the iPhone product line in years, featuring a completely new design and upgraded camera system. In response to Apple's new release, competitors have already begun to adjust their strategies.

Xiaomi co-founder and CEO Lei Jun announced that the launch of its next flagship phone would be moved up to this month, stating that he hopes the company’s products can be compared with Apple’s best offerings. This move reflects the intensity of competition in the Chinese smartphone market.

In addition, AI functionality has not yet become a driving force for sales. Data so far shows Apple has not paid a price for being unable to launch the Apple Intelligence suite in China; consumers still seem mainly to consider practical factors such as battery life and value for money when making purchases. Analysts believe that until AI functions have a substantial impact on consumer purchasing behavior, traditional product features and value propositions will remain the core factors in market competition.

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