Chinese Smartphone Market Takes a Hit: Foreign Brands Struggle to Maintain Market Share as Local Brands Dominate

Decline of 30% in China’s Smartphone Market

In February, the smartphone market in China experienced a significant decline after witnessing a positive trend in January. Data released by the China Academy of Information and Communications Technology showed that smartphone shipments dropped more than 30% year-on-year, totaling 14 million units for the month. Local brands dominated the market, accounting for approximately 83% of the total shipments, while foreign products, such as Apple’s iPhone, saw only about 2.4 million units shipped in February, marking a 31.7% decrease from the previous year.

Looking at the first two months of 2024, total smartphone shipments increased by 12.5% to 43.6 million units, with 5G models seeing growth of 13.3%, totaling 38.7 million units shipped. Apple has been facing a slowdown in iPhone demand in China, with unit sales falling by 24% year-on-year in the first six weeks of 2024, according to Counterpoint Research.

Kuo Ming-Chi, an analyst at TF International Securities, had predicted in late January that annual iPhone shipments would decline by about 15%. This trend poses a significant challenge for smartphone manufacturers, particularly foreign brands, as they strive to maintain their market share in one of the most competitive environments globally. Falling demand and rapidly changing market dynamics will require innovative and adaptive strategies from all major players in the sector.

However, despite this decline in shipments, local brands have continued to dominate the Chinese market accounted for approximately 83% of total shipments while foreign products are still shipping less than half of it.

Overall it is clear that despite some challenges faced by foreign brands due to falling demand and changing market dynamics

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