China, the biggest smartphone market in the world, also experienced a change in power similar to what we have seen on the global market. With a record-high market share of 17.3% in 2023, Apple overtook all other smartphone companies in China. According to data from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, China smartphone shipments totaled 271.3 million units in 2023, which was a decline of 5.0% compared to 2022. This was the lowest volume in a decade, stemming from a soft economic recovery and weak consumer sentiment.
At the global market, Apple breaks Samsung’s 10-year reign to claim 2023’s smartphone crown. While China’s smartphone market struggled in 2023, the fourth quarter showed a promising reversal with a 1.2% YoY growth, ending ten consecutive quarters of decline.
High-end consumers in tier 1-3 cities played a pivotal role in driving demand for flagship products. However, the low- to mid-range segment, constituting over half of the market, faced weakness, hindering overall growth. What fueled Apple’s success in China’s challenging smartphone landscape?
Factors Contributing to Apple’s Triumph
Arthur Guo, senior research analyst in Client System Research for IDC China, attributes Apple’s ascent to its adept use of timely price promotions in third-party channels, effectively stimulating demand. This strategy proved crucial in the face of renewed competition from Huawei and subdued consumer spending sentiment.
“Apple’s climb to the top spot in 2023, especially in light of renewed competition from Huawei and the soft spending sentiment, marks a tremendous success for Apple,” said Arthur Guo. “Apple achieved this thanks to timely price promotions in its third-party channels, which stimulated demand. Meanwhile, Honor maintained its number 2 position thanks to improvement in its channel partnerships and a well-rounded product strategy, capturing the high end with its successful foldable lineup and the low-to-mid range with several popular models.”
China’s Smartphone Market Shipments Analysis in 2023
In the fourth quarter of 2023, China’s smartphone market witnessed a positive shift, shipping around 73.63 million units, marking a notable 1.2% increase compared to the same period the previous year, according to the latest IDC Worldwide Quarterly Mobile Phone Tracker. This rebound comes after a prolonged downturn, with ten consecutive quarters of annual decline finally broken.
While the return to growth is encouraging, it’s essential to note that the overall market performance remains below expectations. The resurgence is primarily fueled by demand from high-end users residing in first- to third-tier cities. Best-selling products, including flagship models such as the Apple iPhone 15, Huawei Mate 60, Xiaomi 14, and vivo X100, dominate the market. However, the sales landscape hasn’t witnessed a significant improvement, and the replacement demand from middle and low-end users, who constitute a substantial portion of the market, is yet to be fully unleashed.
Will Wong, senior research manager for Client Devices at IDC Asia/Pacific, said a notable highlight in Q4 2023 is the return of Huawei to the Top 5 ranking after more than two years. This resurgence is expected to intensify competition, as maintaining a top 5 position in the world’s largest smartphone market becomes a priority for vendors.
“One key highlight we shouldn’t miss in 4Q23 was the return of Huawei to the Top 5 ranking after more than two years,” said Will Wong. “This will only intensify the competition as no vendors will want to lose a top 5 position in the world’s largest smartphone market.”
Despite the positive momentum in the last quarter, China’s smartphone market shipments for the entire year 2023 are projected to be around 271 million units. This reflects a 5.0% decrease from the previous year, constituting the lowest shipment volume in the past decade.
The first half of the year faced challenges due to the prolonged impact of economic conditions and the ongoing epidemic. The market remained sluggish during this period. In the second half of the year, as economic conditions improved and interest in the mobile phone market increased across diverse demographics, there was a gradual uptick in market demand. However, this improvement has not been fully realized.