Recent reports from various institutions have shed light on the Chinese smartphone market for the fourth quarter of 2024. Below is data from Canalys, which, while potentially differing from other sources, provides a valuable perspective.

Apple, VIVO, Huawei, Xiaomi, and OPPO occupy the top five spots, with Honor falling out of the top tier.

Despite retaining the top position, Apple experienced a notable 25% decline in sales. In contrast, Xiaomi and Huawei saw robust growth of 29% and 24% respectively, emerging as the top two performers among the leading brands.

Evidently, Xiaomi and Huawei are mounting a dual-pronged attack on Apple, yielding significant results. Even with the launch of the new iPhone 16, Apple's sales continue to plummet by 25%.

Xiaomi's strategy against Apple is primarily top-down. Historically known for affordable pricing, Xiaomi has gradually increased its price range. Initially priced at 1999 yuan, Xiaomi phones have risen to 2999, 3999, and now exceed 4000 and 5000 yuan. Xiaomi primarily targets the standard and Plus versions of the iPhone, rather than the premium Max variant.

On the other hand, Huawei adopts a bottom-up approach. While its Mate 70 standard version may compete with Apple's standard and Plus models, Huawei's Pro, Ultra, and foldable models such as the Mate X and XT aim for the top-tier Pro and Max segments. In the foldable phone market, Huawei enjoys a monopoly with no domestic competition, and Apple's absence in this category further cements Huawei's dominance.

In response to the competition, Apple has resorted to aggressive pricing tactics. The iPhone 15 saw steep discounts, but the iPhone 16 has taken this a step further with even more drastic price cuts. However, due to a lack of recent innovations, these discounts have failed to significantly boost sales, leading to a decline in Apple product purchases.

With the implementation of the national subsidy program, consumers can now receive a 15% subsidy, capped at 500 yuan, for purchasing phones priced below 6000 yuan. Unfortunately, Apple's Pro and Max series are ineligible due to their post-discount prices exceeding 6000 yuan. Conversely, many Huawei and Xiaomi models qualify for this subsidy.

Therefore, it is anticipated that Apple's sales in the Chinese market will continue to decline. Unless Apple reduces the price of its entry-level Pro model to below 6000 yuan to qualify for the 15% national subsidy, this downward trend may be difficult to reverse. If this happens, Apple's dominance in the market could indeed be waning.

However, if Apple were to lower the price of the entry-level iPhone 16 Pro to within the 6000 yuan range and offer a 500 yuan national subsidy, it would also pose a significant challenge to domestic high-end models. The question remains: will Apple take such a step?