Smartphone sales by foreign brands in China declined sharply in May, with new data showing a 9.7% year-on-year decrease. According to figures released by the China Academy of Information and Communications Technology (CAICT), shipments of foreign-manufactured smartphones—including Apple devices—fell to 4.54 million units during the month.
The broader Chinese smartphone market fared even worse, with total mobile phone shipments declining 21.8% to 23.72 million units. The figures reflect weak consumer demand, heightened competition, and shifting spending habits in the world’s largest smartphone market.
Apple’s Market Share Faces Headwinds
Apple, the dominant foreign smartphone brand in China, appears to be at the center of this downturn. To offset slowing sales, Apple implemented major price cuts on its latest iPhone 16 series in the Chinese market. Discounts of over ₹20,000 (approximately USD 250) were offered during various e-commerce promotional events in an effort to lure buyers back.
Despite these price reductions, foreign phone sales remain under pressure due to intensified competition from Chinese brands such as Huawei, Xiaomi, Vivo, and Oppo. These local players continue to dominate the mid-range and entry-level segments with more affordable and increasingly sophisticated devices.
Weak Spending Despite Promotions
The month of May typically sees higher smartphone sales due to China’s mid-year online shopping festivals. However, this year’s events failed to deliver the usual boost, suggesting that economic uncertainty and consumer caution are weighing heavily on discretionary spending.
Analysts believe the subdued demand is tied to a mix of macroeconomic concerns, including youth unemployment, weaker household income growth, and broader caution over major purchases.
Shifts in Manufacturing and Strategy
The decline in smartphone sales is prompting foreign brands to reevaluate their strategies in the Chinese market. Many are expanding their manufacturing footprint in alternative locations such as India and Vietnam. Recent trade data shows that a growing share of iPhones destined for Western markets is now being assembled outside China, as part of a broader move to diversify supply chains.
At the same time, Chinese brands are increasingly targeting overseas markets to compensate for domestic saturation. Brands like Xiaomi and Transsion have gained market share in Africa, Southeast Asia, and Eastern Europe.
The May figures are the latest sign that China’s smartphone sector—once the engine of global mobile growth—is undergoing a major transformation. With rising competition, shifting consumer preferences, and ongoing economic headwinds, both domestic and foreign brands are facing a new set of challenges in maintaining their foothold in this key market.
