Foreign-branded mobile phones, including Apple Inc. (NASDAQ: AAPL), are facing a tougher market in China. According to new data from the China Academy of Information and Communications Technology (CAICT), sales of these devices dropped 9.7% year-over-year in May, with shipments falling to 4.54 million units for the month. This decline is part of a larger trend that has seen foreign brands, especially Apple, grappling with increased competition from domestic manufacturers and shifting consumer preferences.
The CAICT’s latest figures show that foreign-branded phone shipments in China dropped from the previous year’s levels, landing at 4.54 million units in May. This is a significant decrease, especially when you consider that the overall mobile phone market in China also shrank by 21.8% year-over-year, with total shipments reaching 23.72 million units for the month.
Apple, as the largest foreign player in China’s smartphone market, has a big influence on these numbers. While the CAICT report does not break out Apple’s specific sales, it’s clear that the company’s performance is a major factor in the overall trend for foreign brands.
Several factors are contributing to the drop in foreign-branded phone sales in China:
- Rising Local Competition: Chinese brands like Huawei, Xiaomi, and Oppo have been aggressively innovating and marketing, often offering comparable features at lower prices. This has made it harder for foreign brands to maintain their market share.
- Price Cuts and Promotions: To stay competitive, Apple and other foreign brands have resorted to price reductions. In May, Chinese e-commerce platforms offered discounts of up to 2,530 yuan (about $351) on the latest iPhone 16 models.
- Changing Consumer Preferences: Chinese consumers are increasingly open to domestic brands, which are seen as offering good value and innovation. This shift has been especially pronounced among younger buyers.
Despite the overall decline in foreign-branded phone sales, there are signs that Apple’s fortunes in China may be stabilizing, at least temporarily. Data from Counterpoint Research shows that iPhone sales in mainland China grew 8% year-over-year between April 1 and June 22, 2025, marking Apple’s first quarterly sales increase in the region since 2023. This rebound is largely attributed to aggressive price cuts and government subsidies that made the latest iPhones more accessible.
However, this growth comes after a prolonged period of decline. From the third quarter of 2022 through the first quarter of 2025, Apple saw year-over-year revenue drops in China for all but one quarter. The company has faced headwinds from trade tensions, regulatory pressures, and restrictions on iPhone use in government-linked workplaces.
The Chinese smartphone market is evolving quickly. Domestic brands are not just catching up, they are setting trends and winning over consumers who once preferred foreign names. For Apple and other international players, the challenge is to keep innovating and finding ways to connect with Chinese buyers who have more choices than ever.