Apple's iPhone Faces Declining Market Share as AI Features Lag Behind in China – Bloomberg
Apple Inc. faced a challenging year in 2024 as its iPhone sales declined, losing market share to rising Chinese smartphone brands. According to Counterpoint Research, Apple’s global market share fell to 18%, marking a 1% drop. While global smartphone sales grew by 4%, Apple’s sales dipped by 2%. The absence of advanced AI features, especially in China, the world’s largest smartphone market, has hindered the tech giant’s growth.
Chinese brands like Xiaomi and Vivo, along with Huawei and Honour, were among the fastest-growing competitors, leveraging AI-driven tools to capture the market. Samsung, Apple’s major rival, also lost some ground to these rapidly expanding Chinese manufacturers.
Apple’s struggle to integrate AI capabilities in China has been a critical factor in its market performance. The company launched AI features like writing assistance and image generation with the iPhone 16 in September 2024, but these enhancements have yet to reach Chinese consumers. Apple is still negotiating partnerships with local companies to bring these services to China, which has left it lagging behind competitors who are already innovating with their own AI tools.
Tarun Pathak, a director at Counterpoint Research, explained that the response to Apple’s iPhone 16 series has been lukewarm, primarily due to the delayed rollout of Apple Intelligence features. Despite this, Apple has managed to expand its presence in other regions, such as Latin America, where it has seen notable growth.
The rise of Chinese brands underscores the global shift in the smartphone market, with local manufacturers focusing heavily on AI advancements to attract users. Companies like Motorola, Huawei, and Honour have invested in proprietary AI technologies that enhance user experiences, giving them a competitive edge in the global arena.
Apple’s ability to regain lost ground may hinge on how quickly it can adapt to market demands, particularly in integrating AI features across all regions, including China. As Chinese brands continue to innovate and dominate, Apple faces mounting pressure to stay relevant in a rapidly evolving industry.
