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       Has China Lost Its Taste for the iPhone?

       Apple has deep ties in the country, its second-largest market. But there are signs that Chinese consumers are becoming a harder sell.

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       A transit station in Shanghai this month. While iPhone sales in China fell 24 percent early this year, sales by the domestic giant Huawei rose 64 percent.Credit...Qilai Shen for The New York Times

       By Meaghan Tobin, Alexandra Stevenson and Tripp Mickle

       Meaghan Tobin reported from Taipei, Taiwan; Alexandra Stevenson from Shanghai and Beijing; and Tripp Mickle from San Francisco.

       March 25, 2024Updated 12:34 a.m. ET

       For years, Apple dominated the market for high-end smartphones in China. No other company made a device that could compete with the iPhone’s performance — or its position as a status object in the eyes of wealthy, cosmopolitan shoppers.

       But evidence is mounting that, for many in China, the iPhone no longer holds the appeal it used to. During the first six weeks of the year, historically a peak season for Chinese shoppers to spring for a new phone, iPhone sales fell 24 percent from a year earlier, according to Counterpoint Research, which analyzes the smartphone market.

       Meanwhile, sales for one of Apple’s longstanding Chinese rivals, Huawei, surged 64 percent.

       It’s a challenging time for Apple. Analysts say its latest product, a $3,500 virtual reality headset released in February, is still years away from gaining mainstream appeal. This month, Apple has taken two regulatory hits: a European Union fine of nearly $2 billion for anticompetitive music streaming practices and a U.S. government lawsuit claiming Apple violated antitrust laws.

       For a decade, China has been the iPhone’s most important market after the United States and accounted for roughly 20 percent of Apple’s sales. Now the company’s grip on China could be dislodged by a series of factors: a slowdown in consumer spending, growing pressure from Beijing for people to shun devices made by U.S. companies and the resurgence of national champion Huawei.

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       “The golden time for Apple in China is over,” said Linda Sui, a senior director at TechInsights, a market research firm. One of the biggest reasons is the rising tension between the United States and China over trade and technology, Ms. Sui said. Without a significant lessening of geopolitical stress, it will be difficult for Apple to retain its position.

       Image

       Customers lined up to buy the new iPhone 15 at an Apple Store in Shanghai in September.Credit...Qilai Shen for The New York Times

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       Meaghan Tobin is a technology correspondent for The Times based in Taipei, covering business and tech stories in Asia with a focus on China. More about Meaghan Tobin

       Alexandra Stevenson is the Shanghai bureau chief for The Times, reporting on China’s economy and society. More about Alexandra Stevenson

       Tripp Mickle reports on Apple and Silicon Valley for The Times and is based in San Francisco. His focus on Apple includes product launches, manufacturing issues and political challenges. He also writes about trends across the tech industry, including layoffs, generative A.I. and robot taxis. More about Tripp Mickle

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