China’s Smartphone Market Experiences Significant Decline: What Does It Mean for Brands?

In February of 2024, China’s smartphone market experienced a significant decline after showing positive growth in January. According to data from the China Academy of Information and Communications Technology, smartphone shipments dropped by over 30% compared to the previous year, totaling 14 million units. Local brands dominated the market, accounting for approximately 83% of total shipments, while foreign products, such as Apple’s iPhone, only made up around 2.4 million units, marking a 31.7% decrease from the previous year.

In January of the same year, total smartphone shipments surged by 61.4% to 29.5 million units, with local brands seeing a 165% increase. When looking at the first two months of 2024, total smartphone shipments increased by 12.5% to 43.6 million units, with 5G models experiencing a growth of 13.3% and totaling 38.7 million units shipped.

However, Apple has been facing a decline in iPhone demand in China as unit sales fell by 24% year-on-year in the first six weeks of January of that year. Analysts like Kuo Ming-Chi from TF International Securities have predicted a decline of about 15% in annual iPhone shipments due to this trend poses a significant challenge for smartphone manufacturers, especially foreign brands as they try to maintain their market share in one of the most competitive environments globally.

With declining demand and rapidly changing market dynamics, innovative and adaptive strategies will be necessary for all major players in the industry to keep up with consumers’ changing preferences and emerging technologies such as foldable screens and artificial intelligence (AI).