Huawei reclaimed the leading position in China’s smartphone market during the second quarter, while Apple resumed growth in one of its most critical markets, according to data released by Canalys. In the three months ending June, Huawei shipped 12.2 million smartphones in China, posting a 15% year-on-year increase and capturing an 18% market share. This marks the first time Huawei has led China by market share since the first quarter of 2024, underscoring a notable rebound for the company after a challenging period. Apple, by contrast, shipped 10.1 million smartphones in the same quarter in China, representing a 4% year-on-year rise and placing it in fifth position by market share. Canalys notes that this is the first appearance of growth for Apple in China since the fourth quarter of 2023, highlighting a potential turning point in a market that has long been pivotal for the Cupertino giant.
Shipments refer to the number of devices supplied to retailers and are not a direct measure of sales to end users. They serve as a gauge of demand and supply chain momentum, offering insight into how many devices manufacturers expect to move through distribution channels in the near term. The Canalys figures come ahead of Apple’s quarterly earnings release later this week, a period during which investors will scrutinize the company’s performance in China, a market where Apple has faced intense competition from Huawei and other local players such as Xiaomi. Huawei’s resurgence has complicated the competitive landscape, signaling that the Chinese market remains dynamic and highly price-competitive, with local brands leveraging both hardware refresh cycles and tailored pricing strategies to recapture momentum.
Huawei’s comeback follows a period of substantial adversity linked to U.S. sanctions that had crippled its smartphone business. By the end of 2023, Huawei began to recover, and the second-quarter performance indicates the company has continued to eat into Apple’s share of the Chinese market as it broadens its portfolio and ecosystem. Apple’s recent performance illustrates resilience too, as leadership in China remains challenging even as the company applies targeted measures to shore up demand. Canalys points out that Apple’s price strategies and market promotions in China—alongside broader ecosystem moves—appear to have contributed to the quarterly uptick, even as competition intensifies from Huawei and other Chinese manufacturers. The dynamic underscores a broader trend in which pricing actions and promotional activities can meaningfully influence consumer behavior in a market where price sensitivity remains high and competitive differentiation is increasingly driven by software and services as well as hardware.
Context and Strategic Implications
Huawei’s market leadership is not merely a reflection of hardware strength; it also highlights the company’s broader strategic trajectory in a saturated market. Huawei’s ability to reclaim the top spot by market share in China signals a significant shift in the balance of power among major smartphone brands operating in the country. While shipments are a proxy for demand, the sustained market leadership suggests that Huawei has successfully maintained appeal among Chinese consumers, perhaps aided by its ongoing ecosystem development and aggressive product refresh cycles. The company’s hardware lineup continues to appeal to a broad spectrum of price points, from high-end devices to more affordable models, enabling it to capture share in a market that is highly price conscious and conditions-sensitive.
Apple’s return to growth in China is equally meaningful, particularly given the competitive pressure from Huawei and other domestic brands. The company’s performance in this environment depends on a delicate balance of pricing, product refresh cycles, and value perception among Chinese consumers. Canalys reports that Apple strategically adjusted the pricing of its iPhone 16 series in China, a move that appears to have supported growth during the quarter. Chinese e-commerce platforms discounted iPhone 16 models, which likely stimulated demand among price-sensitive buyers, while Apple also raised trade-in prices for certain iPhone models, adding an additional incentive for upgrading. Taken together, these tactics reflect Apple’s willingness to tailor its go-to-market approach to the Chinese market, where competition is fierce and pricing dynamics can significantly impact consumer behavior and unit sales. The alignment of these moves with industry assessments reinforces the view that Apple’s China strategy remains central to its global growth narrative, even as investors watch for signs of stabilization or acceleration in the region.
The numbers also align with earlier findings from Counterpoint Research, which had already indicated a return to growth for Apple in China during the period in question. This alignment across independent market research firms provides a degree of corroboration for the assessment that Apple’s China performance is improving, even as the broader market remains challenging. In the broader context, Apple’s stock has faced volatility this year, with shares down roughly 14.5% year to date, reflecting concerns about China headwinds, sentiment around the U.S.-China technology landscape, and broader geopolitical frictions. The market environment thus frames Apple’s China recovery as a critical focal point for investors seeking clarity on the company’s long-term growth trajectory in a region that has historically been a major driver of its global sales.
Huawei’s Ecosystem Expansion and Technical Differentiation
The current market dynamics come as Huawei continues to push forward with its independent ecosystem strategy and software development initiatives. The company has launched HarmonyOS 5 across a range of devices, signaling a continued commitment to building a self-developed operating system that operates across its devices. HarmonyOS 5 represents a strategic endeavor to reduce reliance on external platforms and to offer a cohesive user experience across smartphones, tablets, wearables, and other smart devices. Analysts expect this move to accelerate the expansion of Huawei’s ecosystem user base, even as it imposes greater demands on system compatibility and user experience. This ongoing ecosystem push is a critical element in Huawei’s strategy to sustain consumer loyalty and to differentiate its devices through seamless cross-device functionality. The ability to integrate services, performance, and user interfaces across a growing hardware lineup is viewed as a potential differentiator in a market where software and services increasingly influence purchase decisions.
The shift toward a more independent ecosystem can also affect developer engagement and third-party support within Huawei’s platform. As HarmonyOS expands, developers are faced with the task of ensuring compatibility and delivering optimized experiences across a wider array of Huawei devices. This expansion, while promising for Huawei’s long-term control over the consumer experience, requires careful attention to performance, app availability, and cross-device coordination. Lucas Zhong, an analyst at Canalys, underscored that this expansion is likely to accelerate the growth of Huawei’s ecosystem user base, but it will place greater demands on system compatibility and user experience. The net effect of HarmonyOS’s broader deployment will depend on how well Huawei can sustain a high-quality, device-agnostic experience that appeals to a broad audience, including existing Huawei device owners and potential switchers.
Apple’s Strategic Position in a Competitive China
Apple’s growth in China, even if modest in absolute terms, signals that the company can still carve out a path to expansion in a market characterized by intensifying local competition. The company’s pricing decisions for the iPhone 16 series, along with targeted promotions, appear to have resonated with Chinese consumers who are mindful of value during times of economic uncertainty. The combination of pricing alignment, retailer promotions, and trade-in incentives creates a compelling value proposition for upgrade candidates, particularly those weighing the latest features against cost considerations. The result is a nuanced dynamic in which Apple can sustain momentum through a mix of hardware improvements, software enhancements, and strategic market promotions—provided that the price-performance equation remains favorable for customers and channel partners.
Investor sentiment around Apple remains sensitive to China’s performance and the broader geopolitical environment. While the company’s China recovery is encouraging, the stock’s broader trajectory reflects ongoing concerns about macro conditions, regulatory developments, and the potential for market normalization after a period of rapid growth. As Apple prepares for its earnings release, analysts will be dissecting China-specific metrics, including unit shipments, revenue contributions, and gross margins, to gauge how sustainable the rebound is and whether it signals a longer-term realignment in the company’s regional strategy.
Competitive Dynamics in China’s Smartphone Market
The second-quarter data illuminate a highly competitive landscape in which Huawei and Apple are key players, but not the only ones shaping consumer choice. Huawei’s resurgence coexists with ongoing competition from Xiaomi and other domestic brands that continue to pursue aggressive pricing, feature-rich devices, and expansive offline and online distribution strategies. The Chinese market’s responsiveness to price adjustments and promotional activities remains a primary driver of quarterly performance, with carriers, e-commerce platforms, and major retail channels playing pivotal roles in shaping consumer access and purchase decisions. The interplay among these factors helps explain how shipments can rise for Huawei even as the market’s overall size remains finite and demand is influenced by seasonal and macroeconomic factors.
HarmonyOS 5’s deployment is another strategic layer in this competition. As Huawei expands its own OS across a broader device ecosystem, it seeks to improve cross-device integration and create a more compelling value proposition for users who own multiple Huawei devices. This approach could strengthen loyalty and drive continued hardware refreshes, particularly if Huawei can deliver a cohesive user experience that emphasizes interoperability, speed, and reliability. However, the success of such an ecosystem strategy hinges on maintaining high levels of developer engagement, ensuring broad app availability, and delivering a seamless experience across devices and use cases. Canalys’ characterization of HarmonyOS 5 as a driver of ecosystem expansion captures the potential for long-term advantages if Huawei can execute effectively.
From Apple’s perspective, maintaining a strong brand perception in China requires balancing premium positioning with accessibility. The company’s strategy to adjust pricing and to promote trade-ins indicates a pragmatic approach to sustaining demand while managing competitive pressures. Apple’s ability to deliver a compelling mix of hardware advancements, software features, and service initiatives will be crucial as the company navigates a market where consumer loyalty is earned through ongoing value rather than a one-off device upgrade. The broader market dynamics—where Huawei’s ecosystem expansion, Xiaomi’s price-performance emphasis, and Apple’s premium value proposition intersect—will continue to shape the competitive trajectory over the coming quarters.
Investor Perspective, Stock Performance, and Market Outlook
Investors have been closely watching the China narrative as a bellwether for global tech sentiment in an era of shifting supply chains and geopolitical scrutiny. Apple’s stock performance this year—though sensitive to China-related dynamics—will increasingly reflect its ability to sustain growth in a challenging market through pricing, promotions, and product strategy. The recent uptick in China-related growth, if sustained, could help stabilize sentiment by demonstrating that Apple can coordinate market-specific tactics with global brand strength. Yet the broader context remains cautious: geopolitical headwinds, regulatory considerations, and potential tariff considerations at various policy levels can all influence investor confidence and the valuation of tech equities with substantial exposure to China.
Huawei’s market-headline achievement adds another layer to investor analysis. A sustained share of more than 18% in one of the world’s largest smartphone markets is a notable milestone, particularly given the competitive intensity and the ongoing transition toward ecosystem-building. If Huawei can continue expanding HarmonyOS adoption and demonstrate a tangible path to multi-device integration, it could strengthen its position in China and potentially accelerate its long-term global ambitions. For Apple, the key test is whether the China growth trend can be made durable, enabling a broader read-through to revenue and margin stability across the company’s regional portfolio.
China’s smartphone market remains a focal point for global brands because it acts as both a significant sales engine and a barometer for consumer confidence, pricing power, and technology adoption. The mid- and long-term implications of Huawei’s resurgence and Apple’s incremental return to growth include a more competitive price landscape, a potential rebalancing of market shares among leading brands, and a continued emphasis on ecosystem strategies as a differentiator in a crowded field. As the year progresses, investors will be watching for continued evidence of demand resilience, the impact of promotions and promotions-led demand, and the pace at which HarmonyOS gains traction beyond Huawei’s own devices.
Market Promotion, Preferences, and Channel Evolution
In the near term, promotional activity and discount dynamics will be critical in shaping quarterly results. Chinese e-commerce platforms’ discounts on iPhone 16 models, combined with targeted trade-in incentives, suggest a short-term lever that can unlock demand and boost unit shipments. For Huawei, promotions and price positioning across its range may help sustain momentum in a market where price sensitivity is a major determinant of choice. The channel strategy—balancing online platforms, flagship stores, and traditional retail—will continue to determine how effectively both brands convert interest into purchases. The ability to convert shipments into end-user sales will depend on ongoing product differentiation, service quality, and the perceived value of each brand’s ecosystem.
Industry observers will also be watching for how global factors—such as rules affecting cross-border supply chains and international trade dynamics—interact with domestic market conditions to influence ongoing competition in China’s smartphone space. The evolving OS landscapes, including HarmonyOS and the continuing relevance of Android and iOS, will shape software ecosystems and developer activity, further affecting user experience and long-term loyalty. The combination of hardware innovations, pricing tactics, ecosystem expansion, and consumer sentiment will determine which brands gain or lose traction in China in the months ahead.
Outlook and Strategic Takeaways
As Apple prepares for earnings and Huawei strengthens its market position, the Chinese smartphone market underscoring a shifting balance of power. Huawei’s leadership by market share signals a successful comeback and hints at deeper market segmentation strategies that leverage HarmonyOS 5’s cross-device capabilities and a diversified device lineup. Apple’s incremental growth in China, supported by pricing adjustments, trade-in incentives, and channel promotions, demonstrates the company’s readiness to recalibrate to maintain momentum even amid intense competition. The broader takeaway is a Chinese market that remains highly competitive and price-sensitive, where ecosystem depth and cross-device integration can meaningfully influence consumer choices alongside hardware specifications and brand appeal.
Investors should remain vigilant for evolving dynamics, including the pace of HarmonyOS adoption, the endurance of promotional effects on iPhone demand, and the potential impact of broader geopolitical trends on supply chains and consumer confidence. The second-quarter performance suggests a more nuanced, two-track narrative: Huawei gaining share through ecosystem-driven momentum and aggressive market positioning, and Apple sustaining growth through strategic pricing, promotions, and product refinement. How these trajectories unfold in the coming quarters will shape the competitive landscape for smartphones in China and will likely influence global perceptions of both brands’ resilience and strategic nous in a market that continues to matter more than ever.
Conclusion
The second-quarter data portray a China smartphone market marked by a dynamic competition between Huawei and Apple, with Huawei reclaiming the leadership position by market share and Apple recording its first growth in China since late 2023. Huawei’s shipments reached 12.2 million units, representing an 18% market share and a 15% year-on-year increase, while Apple shipped 10.1 million units, up 4% year on year and ranking fifth. These movements occur amid strategic maneuvers by both brands: Huawei advancing HarmonyOS 5 across its ecosystem to bolster cross-device integration, and Apple adjusting pricing, offering promotions through Chinese e-commerce platforms, and enhancing trade-in incentives to stimulate demand. The numbers align with earlier research from Counterpoint, reinforcing the narrative of Apple’s renewed growth in a challenging market.
As competition intensifies, the market is also watching how price strategies, ecosystem development, and consumer promotions will shape longer-term trajectories for Huawei and Apple in China. The broader implications extend beyond quarterly shipment figures, touching on investor sentiment, supply-chain resilience, and the strategic calculus by which each company seeks to sustain momentum in a market characterized by price sensitivity, strong local competition, and rapid technology transitions. In this evolving landscape, the next moves by Huawei in expanding HarmonyOS and by Apple in refining its China-oriented strategy will be pivotal in determining which brand emerges with greater long-term influence in one of the world’s most consequential smartphone markets.