Apple iPhone China market share falls despite Q2 growth

Apple’s iPhone sales in China posted an 8% year-over-year increase in the second quarter of 2025, but this growth in the China market share came at a steep cost and may prove unsustainable. 

According to preliminary data from Counterpoint Research’s China Smartphone Weekly Sales Tracker, the gains were heavily dependent on aggressive price cuts and government subsidies rather than underlying demand strength in the world’s largest smartphone market.

The reality behind Apple’s improved market share in China reveals a company increasingly reliant on unsustainable tactics. Apple slashed iPhone prices by as much as one-third on major Chinese e-commerce platforms in May 2025, while also participating in government subsidy programs that provided up to 500 yuan discounts on select models. 

While Associate Director Ethan Qi of Counterpoint Research praised the timing as “well timed and well received,” the strategy raises questions about Apple’s pricing power and brand premium in the Chinese market.

More concerning for Apple’s long-term prospects is Huawei’s commanding performance, which overshadowed any iPhone gains in China’s market share. Huawei not only secured the number one spot in China’s smartphone market but achieved a substantial 12% year-over-year growth, demonstrating that Chinese consumers increasingly prefer domestic alternatives. 

The contrast is stark: while Apple needed deep discounts to achieve modest growth, Huawei’s success appears driven by genuine consumer preference and brand loyalty.

Senior Analyst Ivan Lam from Counterpoint Research explained Huawei’s dominance, stating that “Huawei is still riding high on the loyalty of its core users as they replace their old phones with new Huawei releases.” 

This consumer loyalty represents a fundamental challenge for Apple’s long-term prospects in China, as it suggests that Chinese users are increasingly gravitating toward domestic alternatives rather than premium international brands.

The promotional period’s limited impact further illustrates Apple’s challenges. Despite aggressive pricing on the iPhone 16 Pro and Pro Max models, the overall 618 sales period remained flat year-over-year, indicating weak underlying consumer demand. 

Even with Apple claiming the top spot during the sales period, the achievement required significant margin sacrifice and government support – hardly a sustainable path forward.

Industry analysts paint a sobering picture of Apple’s immediate future in China. According to the South China Morning Post, Lam warned that “iPhone sales in China will stumble amid weak consumer spending and an ageing iPhone 16 cycle, while tepid iPhone 17 upgrades won’t spark demand” in the second half of 2025. 

This forecast suggests that Apple’s Q2 performance may represent a reprieve rather than a genuine market recovery, with the iPhone’s China market share gains proving unsustainable without continued price erosion.

The competitive landscape has become increasingly challenging for Apple as Chinese smartphone manufacturers aggressively target the premium segment. According to the Counterpoint data, Huawei ranked as China’s biggest smartphone vendor by sales with a 19.4% market share in the first three months of 2025, while Apple’s position remained more precarious.

Beyond market competition, Apple continues to navigate regulatory challenges that could further impact its performance. Chinese rivals have already introduced artificial intelligence features in their smartphones, while Apple is still awaiting regulatory approval to launch its Apple Intelligence service in the country. 

This regulatory lag puts Apple at a disadvantage in a market where AI capabilities are increasingly becoming a key differentiator. The government subsidy program that artificially inflated Apple’s Q2 results is set to diminish, removing a key crutch for the company’s performance. 

Senior Analyst Mengmeng Zhang warned that “the program will be scaled back during the latter half of the year. This creates some risk, especially considering the recent sales season was uneventful.” 

In short, without government support, Apple’s iPhone could face significant pressure in China’s market share rankings, particularly given research firm IDC’s forecast of a 1.9% decline in Apple’s Chinese smartphone shipments for 2025.

The broader market context shows that China’s smartphone shipments plunged 21.8% in May 2025 amid weak consumption, indicating systemic challenges beyond individual brand performance.

For Apple, the Q2 2025 results in China reveal a company struggling to maintain relevance in its third-largest market. While the 8% growth figure may appear positive on paper, the underlying dynamics tell a story of eroding pricing power, increasing dependence on government support, and intensifying competitive pressure from domestic rivals. 

The temporary improvement in Apple’s China market share for iPhone masks fundamental challenges that pricing adjustments alone cannot solve, suggesting that Apple’s Chinese smartphone business faces a challenging road ahead.

The coming quarters will test whether Apple can build on this momentum or whether the Q2 surge represents the peak of its recent China recovery, as Huawei and other domestic competitors continue to strengthen their positions in the world’s most competitive smartphone market.

(Image by Zhiyue)

See also: Apple’s pivot to India: What $900M tariff hit means for Western markets

Looking to revamp your digital transformation strategy? Learn more about Digital Transformation Week taking place in Amsterdam, California, and London. The comprehensive event is co-located with IoT Tech Expo, AI & Big Data Expo, Cyber Security & Cloud Expo, and other leading events.

Explore other upcoming enterprise technology events and webinars powered by TechForge here.

Tags: apple, iPhone, mobile, telecoms