Apple’s phone supplies are still being hampered by rising competition in China.

Apple’s Head Retail, Deirdre o’Brien in Apple Sanlitun. Beijing
Apple’s fortunes may worsen in China in the short-term, as iPhone shipments are reportedly down on last year due to increased competition from local rivals. Apple’s fortunes have slowly changed in China. Some observers are seeing signs of recovery in the area. Apple is not winning every battle in the contested Chinese market. According to an analysis by Canalys’, Apple is experiencing more competition in China and its shipments have been hurt. According to data shared with Reuters by Apple, smartphone shipments dropped 6.7% in Q2 2024 compared to Q2 2023. Shipments for the quarter ending in June reached 9.7 millions units. Apple’s Q2 2023 figures put Apple’s shipments at 10,4 million. Apple’s share of the Chinese market also fell, from 16% a year ago to just 14%. Apple dropped from third to six in terms of smartphone shipment in China for the first quarter. It was just behind Xiaomi, which had 10 million shipments with a 14% market share. Apple’s declining market share is not entirely due to its reduced shipments. Overall, the China market for smartphones saw a 10% increase in shipments year-on-year, with local competitors including Vivo and Huawei benefiting. Other countries have seen the same trend of increased shipments and market share loss. Apple’s Q2 global market share dropped from 16.6% to 15.8%, according to a report published on July 15, 2024. Chinese firms also saw similar increases globally. Vivo went from 7.9% to 9,1%, while Xiaomi rose from 12.4% to 14,8%m. Apple’s supply chain in mainland China is apparently a bottleneck, while Chinese vendors benefit from localized supply chains. “The vendor’s channel strategy maintains healthy inventory levels and aims at stabilizing retail prices and protecting margins for channel partners,” said Canalys Analyst Lucas Zhong. Apple has the potential to rebound in the next year. Zhong says that the localization of Apple Intelligence for China is a critical task to be completed within the next year. Some of this is also seasonal. Apple’s fall releases are not due until the second quarter.