According to Canalys Apple has fallen out of the top five smartphone brands in China and its market share dipped to 14 per cent in the second quarter, a decrease from 15 per cent in the first quarter and 16 per cent a year ago.
Canalys noted this is "the first quarter in history that domestic vendors dominate all the top five positions."
Apple's shipments have been on a downward trend since Q1, with a 25 per cent drop year-on-year to 10 million units.
Apple, which held the third spot in the same period last year, has now dropped to sixth place with approximately 9.7 million units shipped.
Canalys research analyst Lucas Zhong attributes this change to Chinese vendors' strategies for high-end products and their deep collaboration with local supply chains. He cited HONOR's latest Magic V3 as an example, which uses GenAI technology to enhance user experience on foldable devices significantly.
Apple faces challenges in the Chinese market as it seeks to stabilise retail prices and protect channel partner margins. Basically it is too pricey.
Canalys suggests that localising Apple Intelligence services in China could be crucial over the next year. However, Chinese brands have aggressively incorporated AI into their products and seem to have the edge.
Vivo reclaimed the top spot with a 19 per cent market share and 13.1 million units shipped between April and June, primarily driven by strong sales during China's "618" e-commerce festival.
OPPO maintained its second position with 11.3 million units shipped, boosted by the launch of its new Reno 12 series. Huawei spinoff HONOR secured third place with 10.7 million units shipped, marking a 4 per cent year-on-year increase.
Huawei took fourth place with a 15 per cent market share and 10.6 million units shipped, a significant improvement from not being in the top five a year earlier.
The resurgence of Huawei was primarily due to the launch of its Mate 60 smartphone series.
Xiaomi secured the fifth spot, with the buzz from its first electric car, the SU7, contributing to robust sales of its K70 and flagship 14 series.
Overall, the Chinese smartphone market, the world's largest, grew by 10 per cent year on year in the second quarter.
Shipments exceeded 70 million units during this period. This growth signifies a robust domestic demand for smartphones and highlights the increasing competitiveness of local brands in China's tech industry, despite US attempts to cripple their rivals.