Apple’s China troubles keep abounding. While the company’s main concern is an ongoing trade war between the US and China, where most Apple products are manufactured, iPhone sales are another big struggle. And a new report on Q1 smartphone sales in China shows things are getting worse.
High iPhone prices, lack of AI, and targeted subsidy program likely led to Apple’s poor China performance
IDC just published a report on China’s smartphone sales for Q1 2025, and Apple is the only major phone maker that declined year-over-year.
As the chart below shows, Apple came in fifth place in shipments and market share. It was also the only company in the top five who saw sales decline, with China-based Xiaomi and Huawei seeing double-digit growth.
What’s the reason for the decline? Per Tim Cook during the company’s last quarterly earnings report, the lack of Apple Intelligence may be a factor.
But there are likely other key factors at play. From an IDC analyst:
“The US-China tensions have fueled unsettling news, but the silver lining is that the first quarter’s growth gave market players a better position to deal with any challenges in the rest of the year,” said Will Wong, senior research manager for Client Devices at IDC Asia/Pacific. “Xiaomi stood out as it regained the top spot after nearly a decade, a resurgence largely fueled by government subsidies that resonated with its value-conscious customer base, ” added Wong. “Apple, on the other hand, declined as its premium pricing structure prevented it from capitalizing on the subsidies.”
That “premium pricing structure” Wong referenced is likely tied to the government subsidies mentioned above.
China offered subsidies to buyers to motivate smartphone purchases, but those subsidies only applied to low and mid-range smartphones.
The base iPhone 16 would have qualified, but Apple’s popular 16 Pro line is too expensive for customers to benefit from the subsidies.
This, combined with the ongoing lack of AI features, and growing US-China tensions, presented an array of challenges that Apple couldn’t overcome.
Do you think Apple will be able to turn its iPhone sales around in China soon? Why or why not? Let us know in the comments.
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