According to preliminary data from IDC, China's smartphone market saw shipments of 71.6 million units in the first quarter of 2025, marking a 3.3% increase compared to the same period last year, surpassing the global growth rate of 1.5%. However, Apple (AAPL, Financial) experienced a 9% decline in shipments in China, being the only major manufacturer to report a drop. Despite Apple's worldwide leadership, its position in China slipped to fifth place.
This growth in China's smartphone sales was largely driven by government subsidies introduced in January 2025 and the peak sales period during the Chinese New Year. Apple's strategy of maintaining high prices hindered its ability to leverage these subsidies, which mainly benefit smartphones priced lower than Apple's models, favoring local manufacturers.
Meanwhile, Chinese brands like Huawei saw a 10% increase in shipments, and Xiaomi reclaimed its position as the market leader in China after nearly a decade. Xiaomi's recovery was significantly boosted by government subsidies resonating with its value-focused customer base.
Despite current growth, the Chinese smartphone market is expected to face challenges due to potential cost increases and tighter consumer budgets amid U.S.-China trade tensions. Analysts suggest Apple may need to consider adjusting its iPhone 16e pricing to benefit from future subsidies and bolster sales during ongoing trade disputes.
