TLDRs
- Apple iPhone shipments surged 20% in China despite overall market decline.
- Huawei retained top spot with steady growth and 20% share leadership.
- Rising memory costs pressured Android brands across China’s smartphone market.
- Government subsidies boosted premium smartphone demand, benefiting Apple significantly.
Apple Inc. (NASDAQ: AAPL) is drawing renewed investor attention after reporting a sharp rise in iPhone shipments in China, even as the broader smartphone market contracted in the first quarter.
The latest data from Counterpoint Research shows Apple’s shipments in the region surged 20% year-on-year, significantly outperforming its major competitors in an otherwise weakening market.
Apple Leads Premium Demand Surge
Apple’s strong performance stands out against an overall 4% decline in China’s smartphone shipments. While consumer demand softened across most segments, the iPhone maintained strong traction, particularly in the premium category. The company’s 20% shipment growth marked the fastest expansion among all major smartphone vendors in the country during the quarter.
This momentum also helped Apple secure second place in China’s competitive smartphone market, with a 19% share, just behind Huawei, which retained the top position with a 20% share.
Huawei Holds Market Leadership
Despite Apple’s rapid growth, Huawei continues to dominate the Chinese smartphone landscape. The company posted a modest 2% increase in shipments, allowing it to maintain its lead in overall market share.
Huawei’s resilience has been supported by strong domestic brand loyalty and a recovering supply chain. Its ability to compete effectively in both premium and mid-range segments has helped it stay ahead of Apple in total market volume, even as Apple captures stronger growth momentum.
Rivals Struggle Amid Pressure
Other major Chinese smartphone brands faced a more difficult quarter. Xiaomi, Oppo, and Honor all recorded shipment declines, reflecting weakening demand and rising production costs. Vivo was the only notable exception, posting a slight increase in shipments.
According to Counterpoint, rising memory chip prices have significantly increased handset production costs. This has forced several manufacturers to adjust pricing strategies, particularly in the budget segment, where affordability pressures are most pronounced. Supply chain disruptions also contributed to uneven performance across vendors.
Subsidies and Cost Pressures Shape Market
A key factor supporting Apple’s outperformance has been China’s smartphone subsidy program, introduced in January 2025 and expanded to encourage consumer electronics purchases. The program offers a 15% discount on devices priced under 6,000 yuan (about $880), capped at 500 yuan per device. Analysts suggest this has boosted demand for premium and mid-tier smartphones, including iPhones.
Apple CEO Tim Cook previously acknowledged that the subsidies had a noticeable impact on performance in Greater China, describing the period as the first full quarter where the policy meaningfully influenced sales.
At the same time, rising memory costs are reshaping the industry landscape. Counterpoint notes that Apple is better positioned than many competitors to absorb these higher input costs due to its strong supply chain control. In contrast, brands like Oppo and Vivo have already been forced to increase prices on select models, while Huawei may benefit from lower-cost domestic memory suppliers.
Outlook Remains Mixed
While Apple’s growth in China signals strong brand resilience, the broader smartphone market remains under pressure from economic headwinds, supply chain volatility, and rising component costs. Analysts expect continued competition between Apple and Huawei for top position, with pricing dynamics and government policy likely to remain key market drivers in the coming quarters.
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