News Analysis

Apple’s iPhone has lost its top position in China, as evidenced by its stumbling sales for two consecutive months. Meanwhile, Huawei’s sales steadily soared. Political observers believe the shift is a result of the Chinese Communist Party’s (CCP) manipulation of the local market.

In January, Apple shipped about 5.5 million units in China, plunging 39 percent from the previous year; in February, iPhone shipments continued to decline, about 2.4 million units, a 33 percent decline.

According to a report by Counterpoint Research on March 5, in the first six weeks of this year, overall smartphone sales slid 7 percent year-over-year, with significant domestic players like Oppo and Vivo all posting double-digit declines. Apple’s sales also plummeted 24 percent.

This is a rare occurrence in a decade during which China has been the second most important market for iPhone sales, accounting for about 20 percent of its total sales.

However, Huawei’s new Mate 60 launch caused a 64 percent jump in this season’s sluggish sales, overtaking the iPhone to become China’s top-ranked smartphone provider.

“The CCP is interfering with the market, obviously,” Xie Tian, a chair professor at the University of South Carolina’s Aiken School of Business, told The Epoch Times.

Citing Huawei’s strategic significance, Mr. Xie indicated that the CCP will bolster Huawei by all means. “More than a civilian cell phone company, Huawei is backed by all the communications facilities related to national defense. Moreover, the CCP desires to use civilian products to support the exploration and deployment of its military communications technology and appliance: this is its [CCP’s] political motive.”

People look at newly launched smartphones at a Huawei flagship store in Beijing, China on Sep. 25, 2023. (Kevin Frayer/Getty Images)

“The purpose of suppressing Apple is to help Huawei,” Mr. Xie added.

Apple is among the American companies experiencing significant losses in China due to increasing trade and technological tensions and geopolitical pressures between the United States and China.

Chinese Communist government has banned public officials from using iPhones and other foreign-branded smart devices in the workplace, citing concerns about data security. The authorities also requested banks and other state-owned enterprises to switch to domestic software and promote domestic semiconductor manufacturing.

Mr. Xie refuted the CCP’s excuse about data security: “Apple has agreed to build a data center in Guizhou, and its user data stays in China. Therefore, there are no security risks that the Apple technology will leak Chinese consumers’ data—unlike the CCP’s collection of Western consumers’ data through TikTok.”

Besides the CCP’s administrative intervention, another factor weighing down on the smartphone sales market is the economic recession, which was heavily impacted by the CCP’s harsh Zero-COVID measures.

Police try to seal off the area as thousands of customers queue up outside an Apple store in Beijing's upmarket Sanlitun shopping district, in Beijing early morning on Jan. 13, 2012. (AFP via Getty Images)

Fang Yue (a pseudonym), a resident of Zhengzhou, Henan Province, told The Epoch Times on March 27 that Chinese users are less enthusiastic about the iPhone than they used to be. For economic reasons, he uses a domestic phone that is cheaper than an iPhone.

He recalled before the epidemic, “Everyone prefers Apple phones because they have high pixels. Although the price is a bit high, it was easier [for the Chinese] to earn money back then and afford such luxuries, which makes Apple phones a highly sought-after item.”

Mr. Fang also noted that the government’s stringent regulation on iPhones has quenched people’s purchase desires, such as the fact that some public institutions are not allowed to use the iPhone.

The launch of the iPhone 15 in September last year did not make much of a splash in China. On March 21 of this year, the largest Apple Store in Asia opened in Shanghai. Likewise, the fanfare around Apple products had dropped dramatically compared to five years ago when people brought tents and camped out overnight for new series releases.