Apple's iPhone tops Chinese market as Q4 sales surge after Huawei fades

• iPhone hit a record 23% market share in Q4

• Apple overtook Vivo after U.S. sanctions hit Huawei

Apple Inc (NASDAQ: AAPL) was China’s top-selling smartphone brand in the fourth quarter of 2021, reclaiming the number one spot in the world’s largest smartphone market for the first time since 2015.

The newly launched iPhone 13 helped the Cupertino giant out-sell Chinese rivals Xiaomi, Oppo, and Vivo after the market share of China’s biggest phone maker Huawei Technologies Co Ltd shrunk significantly, Counterpoint Research said in a report.

The market analysis report said iPhone’s market share surged 23%, with unit sales volume grew 32% year-on-year in the quarter.

Change in dynamics

The shuffle in the Chinese smartphone market is due to a shift in market dynamics after the U.S. banned once the world’s largest smartphone maker, Huawei, from exporting technology, blocking the company from using Google’s Android operating system and Qualcomm’s processor.

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In the fourth quarter, Huawei had just a 7% market share in the domestic market, and sales declined 73% compared to a year earlier.

“Apple’s stellar performance was driven by a mix of its pricing strategy and gain from Huawei’s premium base,” research analyst Mengmeng Zhang said in the report.

“The new iPhone 13 has led the success due to a relatively lower starting price at its release in China, as well as the new camera and 5G features.”

Shrinking Chinese smartphone market

However, the total smartphone sales in China fell 9%, hurt by chip shortages and an economic slowdown constraining both production and consumer demand, according to Counterpoint Research senior analyst Ivan Lam.

“China’s average smartphone replacement cycle is becoming longer,” Lam said, which has presented an ongoing dilemma for Chinese smartphone makers looking to maintain growth in the domestic market.

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The global chip shortage has also rattled the entire electronics industry, affecting pricing and margins for all hardware makers.

The analyst added that China is “experiencing a complex economic environment where exports are driving the growth, and domestic spending remains lackluster,” which has been a drag on the Chinese economy.

Picture Credit: Global Times