TMTPost -- Latest data increase signs that Apple Inc.’s flagship device is suffering massive decline in sales in face of increasing competition from Chinese peers like Huawei Technologies Co., Ltd.

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iPhone sales in China sank 19% year-over-year (YoY) in the first quarter of 2024, recording the device’s worst performance since Covid-19 struck around 2020, even though overall smartphone sales in the country grew 1.5% YoY, marking the second consecutive quarter of positive growth,  according to Counterpoint Research, a global technology market research firm. Data from the firm showed Huawei stood out as the best performer among all original equipment manufacturers (OEMs) , surging 69.7% YoY in sales. Huawei’s growth was largely attributed to the successful launch of the 5G-capable Mate 60 series as well as its enduring brand reputation, helping it to gain a massive share in the $600+ premium segment, Counterpoint noted.

Despite Huawei’s comeback, Honor, the brand spun off by Huawei in November 2022, managed to deliver a 11.5% YoY increase in sales in the March quarter, driven by its popular models, such as the X50 and Play 40, and its expansion in offline channels. Xiaomi, another outperformer, saw sales that quarter rose 8.6% YoY.  Sales of vivo edged 0.4% lower YoY, though gained the top spot with a market share of 17.4%, followed by Honor and Apple with a 16.1% share and a 15.7% share respectively. Huawei took the fourth position with a share of 15.5%, next to Apple.

Vivo sales in the first quarter were fueled by strong sales of the Y35 Plus and Y36 models in the low-end segment and the S18 in the mid-end segment, while  Apple’s sales were subdued during the quarter as Huawei’s comeback has directly impacted Apple in the premium segment, commented Ivan Lam, senior research analyst at Counterpoint. Besides, the replacement demand for Apple has been slightly subdued compared to previous years, Lam added.

Data in the first quarter showcased momentum is building on a recovery as the sales promotions during the Chinese New Year festivities which fell on that quarter were the biggest growth driver. However, Counterpoint senior analyst Mengmeng Zhang noted the first three months of this year witnessed the most competitive quarter ever, with only 3% points separating the top six players in terms of market share. “Smartphone OEMs compete fiercely during the festive period, finalizing various marketing and promotional strategies well in advance. In particular, Chinese OEMs, with their ample cost-effective offerings, capitalize on the surge in sales in the low-end segment as migrant workers purchase more affordable, budget smartphones when returning home for the holidays. This trend further narrowed the market share gap among major players,” Zhang said.

Earlier this month, the International Data Corporation (IDC) estimated global smartphone shipments increased 7.8% YoY to 289.4 million units in the first quarter while iPhone shipments that quarter dived 9.6% YoY to 50.10 million units. Apple’s shipments missed analysts’ estimates of 51.7 million units, suggested the U.S. tech giant handed back top smartphone seller title to Samsung. The South Korean company shipped 60.1 million units in the quarter ended March with a 0.1% YoY decline, according to IDC. The market research firm estimated Samsung took 20.8% of market share that quarter, down from 22.5% a year ago, and Apple’s share dropped 3.4 points YoY to 20.7%.

 While IDC expected Samsung and Apple to maintain their hold on the high end of the market, the resurgence of Huawei in China, as well as notable gains from Xiaomi, Transsion, OPPO/OnePlus, and vivo will likely have both OEMs looking for areas to expand and diversify. According to IDC, Xiaomi took the third position with shipments of 40.8 million units in the first quarter, surging 33.8% YoY. The Chinese smartphone leader was followed by two domestic peers-- Transsion and OPPO, which shipped 28.5 million units and 25.2 million units, respectively, representing a 84.9% YoY rise and a 8.5% YoY drop.

One of emerging trends in the smartphone market over the past two years is that a shift in power among the Top 5 companies, which will likely continue as market players adjust their strategies in a post-recovery world, said Nabila Popal, research director with IDC's Worldwide Tracker team. “Xiaomi is coming back strong from the large declines experienced over the past two years and Transsion is becoming a stable presence in the Top 5 with aggressive growth in international markets. In contrast, while the Top 2 players both saw negative growth in the first quarter, it seems Samsung is in a stronger position overall than they were in recent quarters,” Popal said.