• Apple’s 9% decline in China smartphone market shipments, dropping to 5th place with 13.7% market share in Q1 2025.

• Xiaomi leads with nearly 40% growth as Chinese subsidies favour local brands, while Trump’s new tariffs create market uncertainty.

Apple’s position in the China smartphone market has deteriorated significantly in the first quarter of 2025, with shipments plunging 9% year-over-year to just 9.8 million units, according to preliminary data from the International Data Corporation (IDC). 

This sharp decline knocked Apple from its previous leadership position to fifth place in China’s highly competitive smartphone landscape, where it now holds only 13.7% market share—down from 15.6% during the same period last year.

The drop made Apple the only top-five-ranked handset vendor in China to record a decline during a quarter when the overall Chinese smartphone market grew 3.3% to 71.6 million units. This underperformance comes at a critical time, as US-China trade tensions escalate under President Donald Trump’s new tariff regime.

“The US-China tensions have fueled unsettling news, but the silver lining is that the first quarter’s growth gave market players a better position to deal with any challenges for the rest of the year,” said Will Wong, senior research manager for Client Devices at IDC Asia/Pacific.

Local rivals dominate with government support

Chinese tech giant Xiaomi reclaimed the top spot after nearly a decade, with shipments surging 39.9% year-over-year to 13.3 million units, securing an 18.6% market share. The company’s resurgence was largely driven by Beijing’s consumption-boosting subsidies, which began on January 20, 2025.

The government scheme provides consumers a 15% subsidy – capped at 500 yuan (US$68.50) per purchase – for buying smartphones, tablets, and smartwatches priced under 6,000 yuan. Apple’s premium pricing structure prevented it from capitalising on these subsidies, according to IDC’s Wong.

Huawei Technologies took second place with 12.9 million units shipped, marking a 10% increase year-over-year. Since its return to the 5G handset market in August 2023, Huawei has seen continued momentum, capturing an 18% market share. OPPO and vivo rounded out the top five with 11.2 million and 10.3 million units, respectively.

Trade tensions cast a shadow over the market

The current market dynamics are unfolding against a backdrop of escalating trade tensions. The Trump administration has imposed cumulative tariffs of 145% on Chinese goods, while Beijing slapped a 125% tariff on US goods. Although the US exempted smartphones, laptops, and chip-making equipment from “reciprocal tariffs,” these products remain subject to semiconductor tariffs.

Arthur Guo, senior research analyst in Client System Research for IDC China, warned that “looking ahead, the market is expected to face challenges as the US-China trade tensions may lead to cost increases and tighter consumer budgets.”

Apple’s strategic challenges in China

Apple’s struggles in the Chinese market extend beyond pricing issues. The company is still awaiting Beijing’s approval to offer artificial intelligence features on its iPhones in China – a crucial factor as competitors continue to integrate advanced AI capabilities into their devices.

Despite briefly claiming the top spot in the final quarter of 2024 with a marginal lead, Apple lost out to local rivals Vivo and Huawei on annual shipments that year. That trend has continued into 2025, with Apple’s China smartphone market performance showing signs of significant strain.

The results contrast sharply with China’s overall market growth, which marked its sixth consecutive quarter of expansion. While the market grew 3.3% compared to global growth of 1.5%, Apple’s 9% decline underscores the company’s vulnerability in this crucial market.

Manufacturing impact and supply chain concerns

Trade tensions have already begun affecting Apple‘s supply chain. Recent reports indicate that China‘s largest iPhone factory—operated by Apple‘s manufacturing partner—has resumed hiring after the US government exempted consumer electronics from specific tariffs. This development highlights the disruption the new tariffs have caused to Apple‘s production capabilities.

As Apple’s smartphone market in China continues to face pressure from both competitive and geopolitical factors, the company must navigate a complex landscape where local rivals benefit from government support while trade policies create uncertainty. 

With Chinese consumers showing a preference for value-conscious options amid economic pressures, Apple’s premium positioning may continue to pose challenges in the world’s largest smartphone market.

“The subsidy level as well as complexity in the rollout process led to lower-than-expected demand from the consumers,” noted Guo, suggesting that even government stimulus measures have their limits in boosting market growth.

As the year progresses, Apple will need to adapt its China strategy to address both competitive pressures and regulatory challenges if it hopes to regain its former market position. 

The company’s performance in subsequent quarters will be crucial in determining whether this decline represents a temporary setback or a more permanent shift in consumer preferences within China’s smartphone market