Apple faces challenges in the Chinese market against Huawei’s triple-digit phone numbers

Taipei, Taiwan

The US-China technology war continues in the smartphone market in China, where global rivals Apple and Huawei released new phones this week. Industry experts say that Apple, which has no home base, faces many challenges to protect its market share in the country.

The most prominent feature of the iPhone 16 is its artificial intelligence system, called Apple Intelligence, while the Huawei Mate XT offers a new triple screen technology. But with a starting price of RMB 19,999, which is about $2,810, the Mate XT will cost almost three times more than the iPhone 16.

According to data from VMall, Huawei’s official shopping site, about 5.74 million people in China have ordered the Mate XT as early as Thursday, 5½ days after Huawei started accepting orders.

But in a survey conducted on the Chinese microblogging site Weibo by Radio France International, half of the 9,200 respondents said they would not buy the Mate XT because the price was prohibitive. Another 3,500 said they are not in the market for a new phone right now.

“I suggest that Huawei release more products that ordinary people can afford,” a Weibo user wrote under the name “Diamond Man Yang Dong Feng.”

The iPhone 16 is not available for pre-order until Friday, but some e-commerce sellers in China have promised to deliver the new devices to customers within half a day to two days of sale.

In the competition between Apple and Huawei, the iPhone 16 has inherent problems, said Shih-Fang Chiu, a senior industry analyst at the Taiwan Economic Research Institute.

“Apple’s strength is information security and privacy, but this is difficult to achieve in the Chinese market, where the government can control the details of the Chinese market to a relatively high degree. In the era of AI mobile phones, this it will bring problems to Apple’s development in the Chinese market,” said Chiu.

Apple’s AI service on its iPhone 16 will gradually roll out in different languages, first in English and other languages ​​later this year. The Chinese version won’t be available until 2025.

There are other challenges Apple faces, Chiu added, such as regulatory controls, consumer sentiment favoring local products and reduced spending power during China’s economic slowdown.

According to Counterpoint Research statistics, Huawei holds a 15% market share in the second quarter of 2024, surpassing Apple’s 14% market share. That compares to Apple’s 17.3% share in 2023 as reported by industry research firm International Data Corporation China, or IDC China.

Ryan Reith, assistant director of IDC’s Mobile Device Tracker suite program, said in a written response to VOA that the iPhone 16 has not made major hardware improvements and that AI applications alone are not attractive because consumers has GPT and other AI solutions.

AI tools are also another obstacle. Analyst Chih-Yen Tai said the iPhone 16’s AI services include personal data collection, information usage and cloud computing, which will require cooperation with Chinese service providers.

That, along with the ban on Chinese civil servants and state-owned enterprise employees from using their iPhones at work in recent years, will affect sales of Apple products, said Tai, deputy director of the Center for Policy Analysis. of Science and Technology. at the Chung-Hua Institution for Economic Research in Taipei.

“China’s nationalism has led to a strong number of orders” for Huawei’s three phones, Tai said.

“Competitors in China will sell the concept [to consumers] that iPhones will soon be out of the mainstream smartphone market. So, in the next step, the cheaper versions of the iPhone will be the key to whether it is so [Apple] it can go back to China or its previous sales era,” Tai said.

Tzu-Ang Chen, a senior consultant in the digital technology industry in Taipei, said that usage of Huawei’s HarmonyOS operating system surpassed Apple’s in China in the first quarter of this year, representing China’s determination to “go with their way” and create. “one world, two systems.”

“The US-China technology war has extended to smartphones,” Chen said: “iPhone sales in China will get worse, it’s clear that Huawei is doing well, and together with patriotism , Apple’s position in the hearts of 1.4 billion people will never come back.”

He said that as China seeks to develop pro-China markets among countries that are members of the Belt and Road Initiative in Southeast Asia, the Middle East and Africa, mobile phones made in China may be they are their first choice.

VOA’s Adrianna Zhang contributed to this report.