Apple sinks to 3rd place in China as iPhone sales slide

• Apple's China headache is getting worse.
• A slide in iPhone sales has left Apple in third place in China, per Counterpoint Research estimates.
• It's the iPhone's worst performance in China since 2020 amid rising competition from local rivals.

Apple's struggles in China just keep getting worse.

It's sunk from first to third place in the Chinese smartphone market after iPhone sales tumbled 19% in the first three months of the year, according to estimates from Counterpoint Research.

The sales slump marks the iPhone's worst performance in China since 2020 and underlines increasingly tough competition from local rivals.

Chinese-based rivals Vivo and Honor outpaced Apple's sales in the first quarter of the year, per Counterpoint data. Apple finished the quarter with a 15.7% share of the market, down from 19.7% in the same period last year and barely ahead of Huawei's 15.5%, per the research outfit.

In stark contrast with Apple's slide, Huawei sales soared by almost 70% compared with the first three months of 2023.

Counterpoint research analyst Ivan Lam said in a note that Huawei's surge had directly affected iPhone sales in China. Apple had also been hit by fewer consumers replacing their smartphones, he added.

Huawei's rise has given Apple CEO Tim Cook a new headache, given he's already dealing with disappointing iPhone 15 sales and government bans in China. Cook went to China in March to visit Apple's newest store in Shanghai and attend the high-profile China Development Forum in Beijing.

Huawei recently released a new series of smartphones called the Pura 70 that has an advanced camera system similar to the trio of lenses on the iPhone Pro range.

The new phones, which start at $760, provide Huawei with a new opportunity to win over Chinese customers from Apple. Last year the company launched the Mate 60 Pro series that was aimed at iPhone 15 buyers.

Despite the stiff competition, Lam said iPhone sales could still reverse their downward slide.

"We are seeing slow but steady improvement from week to week, so momentum could be shifting," he said. "For the second quarter, the possibility of new color options combined with aggressive sales initiatives could bring the brand back into positive territory."

The 19% decline is slightly better than the 24% slide that Counterpoint had estimated for the first six weeks of the year.

The Chinese smartphone market is crucial for Apple as it's second only to the US, and is ahead of Europe.

Apple has been fighting on multiple fronts this year. In March, the European Commission fined the company about 1.8 billion euros ($1.95 billion). In the US, Apple is battling an antitrust lawsuit from the Department of Justice.

Apple did not immediately respond to a request for comment from Business Insider, made outside normal working hours.