Apple is also presently undergoing intense difficulties in the Chinese smartphone market. Apple saw a 9% decline year over year in iPhone shipments in the first quarter of 2025, the sole significant smartphone vendor to suffer a decrease during a 3.3% growth period. Apple’s market share dropped from 17.4% last quarter to 13.7% as a result of this decline.
There are a number of reasons the sales have been dropping. Apple’s premium price positioning, which prevents its products from being able to qualify to take advantage of the new Chinese government subsidies implemented in January of 2025, is one of the big ones. The subsidies cover 15% of the price of electronics that are priced below 6,000 yuan, or about $820, which is below most Apple products.
Also, the issue that new iPhones in China do not come equipped with Apple Intelligence features has influenced competitiveness. Despite Apple Intelligence having been introduced at the same time as the iPhone 16 series in September 2024 in the United States, it remains to be launched in China due to regulatory restrictions. Such a restriction has granted competitors like Huawei and Xiaomi, which market AI-supported phones, a competitive advantage.
It is also driven by local brands. Apple fell into the third position in the Chinese smartphone market within the fourth quarter of 2024, while Vivo and Huawei occupied 17% and 16% of the market, respectively, following Apple’s decline in market share to 15%.
Also, Apple’s issues are compounded by geopolitical factors like the reimposition of U.S. tariffs again on Chinese-made products. Undoing a previous exemption for tech items would mean that Apple product prices might be increased.
Apple still does well in other segments with such flops. Apple captured a 19% market share in Q1 2025 and emerged as the biggest smartphone seller in the world due to its top-selling iPhone 16e and its different models.
Additional details about Apple’s performance and how the company will handle the challenges in China will be revealed when the company releases its next earnings on May 1, 2025.
