Foreign smartphone shipments in China have plummeted dramatically, with Apple bearing the brunt of this decline. In November 2024, shipments dropped 47.4% year-on-year, reaching only 3.04 million units compared to 5.769 million units in the previous year. This marks the fourth consecutive month of declining sales, signaling a profound shift in the world's largest smartphone market.

Domestic brands like Huawei have emerged as formidable competitors, dramatically reshaping the smartphone ecosystem. Huawei experienced a remarkable 42% sales increase in the third quarter, while Apple's market share slipped by 0.3%. The local manufacturers are leveraging advanced technologies, particularly artificial intelligence capabilities, to attract tech-savvy consumers. Huawei's strategic launch of premium smartphones has resonated strongly with Chinese consumers, challenging Apple's market dominance.

The challenging environment stems from multiple factors. China's economic uncertainty and deflationary pressures have significantly impacted consumer spending. Apple faces additional hurdles with regulatory restrictions preventing the deployment of advanced AI features like Apple Intelligence. Local competitors are actively promoting their AI functionalities, creating a competitive disadvantage for Apple.

To counter these challenges, Apple has initiated unprecedented strategies. The company launched a rare four-day promotional campaign from January 4-7, offering discounts up to 500 yuan ($68) on flagship iPhone 16 Pro and Pro Max models. CEO Tim Cook has been actively engaging with local companies, seeking partnerships with tech giants like Tencent and ByteDance to develop localized AI capabilities. These efforts represent a critical attempt to revive Apple's market position in a rapidly evolving technological landscape.