• • Apple’s market share in China faces pressure as company closes first mainland store.
  • Huawei captures 18% of Q2 smartphone sales.
  • Apple sees 4% shipment increase, but fifth behind Chinese competitors in the world’s largest market.

The symbolic weight of Apple shuttering its first mainland China store in 17 years cannot be understated – it marks a reversal of fortune for a company that once epitomised Western tech dominance in the world’s largest consumer market.

As Apple’s market share in China faces pressure from resurgent local competitors, the closure of its Dalian outlet coincides with Huawei’s return to smartphone market leadership, signalling a shift in the competitive landscape that extends beyond quarterly sales figures.

The numbers behind Huawei’s comeback

The data tells a story of corporate resurrection. According to the latest research from Canalys, Huawei shipped 12.2 million smartphones in the second quarter of 2025, capturing an 18% market share with a robust 15% year-on-year growth. The achievement is particularly remarkable, given that the company’s smartphone business was severely crippled by US sanctions a few years ago.

Huawei’s strategic pivot to ecosystem independence has been central to this recovery. “Huawei launched the Nova 14 series, its first Nova lineup to feature HarmonyOS 5.0. The move is expected to accelerate the expansion of its independent ecosystem’s user base, while also placing greater demands on system compatibility and user experience,” said Lucas Zhong, an analyst at Canalys.

Apple’s paradoxical position: Growing yet declining

The irony of Apple’s current predicament lies in its simultaneous growth and marginalisation. Despite achieving its first quarterly growth in China since late 2023, with 10.1 million smartphone shipments representing a 4% year-over-year increase, the company has slipped to fifth place in the market hierarchy.

The growth required significant concessions. Apple “strategically adjusted its pricing for the iPhone 16 series in China,” according to Canalys, while Chinese e-commerce platforms offered substantial discounts during the quarter. Apple also increased trade-in prices for older iPhone models – moves that boosted volume but helped undermine its premium positioning.

Physical retreat: The end of an era in Dalian

The closure of Apple’s Dalian Parkland Mall store on August 9 represents a retail adjustment and the first time the company has shuttered a directly-managed outlet since establishing its China presence in 2008. The symbolic weight extends beyond the 7.5 million Dalian residents who will lose direct access to Apple’s premium retail experience.

“Given the departure of several retailers at the Parkland Mall, we have decided to close our store,” Brian Bumbery, an Apple spokesman, told The New York Times, framing the closure as a response to broader mall difficulties rather than company-specific challenges.

The broader battleground: Beyond hardware to ecosystems

The competition has evolved beyond traditional hardware specifications to encompass complete technological ecosystems. Huawei’s rollout of HarmonyOS 5 in devices positions it as a direct challenger to both Google’s Android and Apple’s iOS, while Chinese brands invest heavily in proprietary technologies that reduce dependence on foreign platforms.

Xiaomi’s unveiling of its in-house XRing O1 chipset exemplifies this trend toward technological sovereignty. Meanwhile, Vivo’s staggered product releases in multiple series demonstrate market segmentation strategies that Apple’s more limited product range struggles to match.

The overall Chinese smartphone market declined 4% year-on-year in Q2 2025, yet this contraction masks underlying resilience. “The Q2 correction is mainly a result of reshaped seasonality driven by the national subsidy programme in early 2025,” explained Amber Liu, practice leader at Canalys.

First-half shipments increased slightly year-on-year, suggesting that Apple’s challenges stem from competitive positioning rather than market deterioration.

Geopolitical headwinds and future challenges

Apple’s challenges in China extend beyond market competition to geopolitical tensions. US President Donald Trump has threatened Apple with tariffs and urged CEO Tim Cook to manufacture iPhones in America, a move experts consider nearly impossible to implement effectively in a reasonable timeframe.

Meanwhile, Apple’s market share in China has been affected by the company’s stock performance, with shares falling around 14.5% this year, partly due to concerns over China and geopolitical headwinds.

Technology ecosystem battle

The competition extends beyond hardware to ecosystem development. Huawei has launched various smartphones during its roll-out of HarmonyOS 5 to devices, positioning it as a rival to Google’s Android and Apple’s iOS. Its move aims to reduce dependence on foreign technology platforms and create a more integrated user experience for Chinese consumers.

Market outlook and strategic implications

Despite current challenges, analysts remain cautiously optimistic about the Chinese market’s trajectory. “Mainland China’s smartphone market is on track for modest full-year growth and is set to outperform the global market in 2025,” Liu said. “In the second half, consumer sentiment is expected to continue recovering amid signs of economic resilience.”

However, any recovery may not benefit all players equally. Apple’s premium positioning, once an unassailable advantage, now appears vulnerable to Chinese brands that offer comparable features at more accessible prices while addressing local preferences more accurately.

The question facing Apple is whether its global playbook remains viable in a market that rewards local adaptation over universal appeal. The company’s store closure, while tactically insignificant, represents the challenge of maintaining Western tech hegemony at a time of Chinese technological ascendancy.

What unfolds in China over the coming quarters will likely determine whether Apple can reinvent its approach to emerging markets globally, or whether Cupertino’s best days in the world’s largest consumer market are behind it.

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