Summarize this content to 2000 words in 6 paragraphs in Arabic Stay informed with free updatesSimply sign up to the Technology sector myFT Digest — delivered directly to your inbox.Local smartphone makers Vivo and Huawei leapfrogged Apple to become the top two sellers in the Chinese market last year, dealing a blow to the iPhone maker as it struggles to introduce AI features on the mainland and fight competition from domestic players.Apple’s China smartphone shipments slipped to 42.9mn in 2024, 17 per cent lower than the year before, according to market research firm Canalys. That cut its market share by 4 percentage points to 15 per cent. Shipments in the final quarter dropped 25 per cent year on year.Vivo and Huawei’s shipments increased 11 per cent and 37 per cent for market shares of 17 per cent and 16 per cent respectively. The overall smartphone market grew 4 per cent on 2023, with 285mn units shipped.The figures come as the US technology company faces growing pressure from local premium smartphone brands, particularly Huawei, which have benefited from patriotic buying and the ability to roll out artificial intelligence-powered features to their devices. The company’s Apple Intelligence service is not available on the Chinese mainland.“Apple and its iPhone 16 series . . . faced growing competitive pressure from domestic flagship devices,” said Amber Liu, a research manager at Canalys, adding that Vivo had “shown strong momentum” by strengthening tie-ups with operators and employing effective marketing and product strategies “to solidify its position in entry-level to mid-to-high-end segments”.Apple’s overall Greater China revenues fell nearly 8 per cent in its year ending in September. Chief executive Tim Cook visited China three times last year, with the company seeking to navigate the country’s complex regulatory regime and roll out the artificial intelligence features introduced with the iPhone 16.Analysts expect a subsidy programme — unveiled this month by the National Development and Reform Commission, China’s state planner — to boost demand for smartphones. The $11bn programme will grant subsidies of 15 to 20 per cent to people who trade-in old smartphones, tablets and other devices to buy consumer electronics worth less than Rmb6,000 ($818).“Among the major [manufacturers], we think companies with exposure to Huawei, Honor, Oppo, Vivo and Xiaomi (by rank) are well-positioned to benefit,” HSBC analyst Frank He wrote in a note last week, noting that the structure of the subsidies meant that owners of phones worth between Rmb3,333 and Rmb6,000 stood to benefit the most. “We see a limited impact on Apple’s supply chain.”
