Huawei Continues Its Dominance of Apple In China

Unless there is a major breakthrough in the industry, Huawei is expected to dominate the Chinese market since releasing its Mate 60 Pro series last August. The turnaround move allowed the Chinese tech giant knock erstwhile leader Apple from its pedestal.

Huawei and other homegrown smartphone makers have experienced double-digit growth this year, boosting smartphone shipments in China by about 8.9 percent year-over-year in the second quarter, according to the International Data Corporation.

China's Vivo, Huawei, Oppo, Honor — a former subsidiary of Huawei — and Xiaomi made up the top sharers of China’s smartphone market, respectively. Apple, meanwhile, fell to sixth place. And despite cutting prices on some iPhone models to compete, the data showed Apple’s year-over-year sales declined 3.1 percent.

Apple’s iPhone shipments and sales in China experienced "marginal decline" in the second quarter of this year, Counterpoint Research said, noting that during the same period last year, Apple had the third-highest number of shipments — only behind Oppo and Vivo — while Huawei was in sixth place.

Apple’s fall in China can be tied to many factors, experts said, including the country’s faltering economy and changes in how its citizens view their country versus the rest of the world amid the pandemic and the growing number of sanctions imposed by the West.

"There’s a higher degree of nationalist sentiment right now within China, of buying local and buying the home team versus buying an American product,” Arthur Dong, professor at Georgetown University’s McDonough School of Business, told Quartz.

The competition between Apple and Huawei in China is also tied to the difference in what Apple can offer its U.S. consumers versus its Chinese consumers, Tsay said.

Apple’s advantage in the U.S. is its control over its ecosystem, according to Andy Tsay, professor of business and analytics at Santa Clara University’s Leavey School of Business as reported by Quartz. This has allowed Apple to deliver a differentiated user experience. China, however, has a "unique situation" where its "version" of Apple’s iOS is WeChat.

"You almost don’t need the tightly integrated, walled garden of the Apple ecosystem in China to deliver that experience because it already exists inside the WeChat world," Tsay said. "That gives the local cell phone companies an advantage in the sense that they can use Android or their own version of Android or a brand new operating system — they don’t need to create that self-contained ecosystem that Apple has so painstakingly created over the years because Tencent (TCEHY) already did it for them by creating WeChat."