Apple’s Smartphone Shipments in China Drop 9% Amid Rising Competition and Government Subsidies

Apple’s smartphone shipments in China dropped by 9% in the first quarter of 2025 compared to the same period last year, marking the tech giant’s seventh consecutive quarter of declining sales in the world’s largest smartphone market, according to new data released by research firm IDC.

The report revealed that Apple shipped 9.8 million iPhones during the quarter, down from 10.8 million a year earlier. Its market share fell to 13.7%, down significantly from 17.4% in the previous quarter, making it the only major smartphone brand in China to report a decline.

In stark contrast, Chinese competitor Xiaomi experienced a surge in demand, with shipments jumping 40% year-on-year to 13.3 million units. This growth helped Xiaomi maintain its position as the market leader. Overall, China’s smartphone market saw a modest 3.3% increase in total shipments during the quarter, signaling a broader recovery in consumer electronics demand.

Industry analysts point to several reasons for Apple’s declining performance, chief among them being the company’s premium pricing strategy. IDC analyst Will Wong noted that Apple’s high price point excluded it from benefiting from new government subsidies introduced in January, which have been instrumental in driving smartphone sales growth.

Under the new subsidy program, the Chinese government offers consumers a 15% refund on select electronics purchases, including smartphones priced below 6,000 yuan (approximately $820). Apple’s flagship devices, which typically exceed this price threshold, do not qualify for the subsidy, placing the company at a competitive disadvantage.

“Apple’s failure to align with the subsidy program’s criteria significantly limited its ability to capitalize on the recent boost in consumer spending,” said Wong. “Meanwhile, domestic brands like Xiaomi, with a wide range of budget-friendly options, were well-positioned to take advantage.”

Apple currently ranks fifth in China’s smartphone market behind Xiaomi, Oppo, Vivo, and Huawei — all of which offer more competitively priced devices. With Chinese brands increasingly gaining favor among local consumers and offering advanced features at lower costs, Apple’s position in the market remains precarious.

The decline comes at a critical time for Apple, as it prepares to launch its next generation of iPhones later this year. Industry watchers are closely observing whether the company will adapt its pricing strategy or offer region-specific models to regain market share in China.

Despite the setback, Apple maintains a strong presence in the premium segment and retains a loyal customer base. However, the latest figures underscore the growing challenges the company faces as it competes with agile and increasingly innovative Chinese manufacturers.