Huawei reclaims China smartphone crown as Apple surges in Q4
Huawei reclaimed annual leadership with 16.4% share while Apple dominated Q4 on iPhone 17 strength. Rising memory costs forced Chinese brands to abandon budget segments.
China shipped 284.6M smartphones in 2025, down 0.6% YoY as subsidies faded mid-year
Huawei topped annual rankings with 46.7M units (16.4% share), Apple second at 46.2M (16.2%)
Apple dominated Q4 with 16M units (21.1% share), up 21.5% YoY on iPhone 17 launch strength
Xiaomi posted fastest growth among top five brands at 4.3% YoY despite fourth-place finish
Rising memory costs force retreat from budget segments as brands prioritize profitability over volume
China’s smartphone market contracted for another year in 2025. Total shipments fell to 284.6M units. The 0.6% year-over-year decline masks deeper strategic shifts. Brands navigated subsidy cliffs, surging component costs, and intensifying premium competition.
Huawei reclaimed the annual crown with 16.4% market share after years of US sanctions. Apple and vivo tied for second at 16.2% each. Their trajectories diverged sharply. Xiaomi and OPPO rounded out the top five. Xiaomi posted the strongest growth among major players.
The year split into two distinct phases. Government subsidies and Lunar New Year demand drove early momentum. But the stimulus proved short-lived as local funds depleted. Consumers pulled back. Fourth-quarter dynamics then scrambled the rankings. Apple seized a commanding lead on new product strength. Chinese brands retreated from low-margin segments.
IDC is a global market intelligence firm tracking technology shipments and trends. Their quarterly reports provide authoritative data on smartphone market dynamics. The firm surveys supply chain partners and retailers to compile shipment estimates.
Huawei’s return to dominance validates survival strategy
Huawei shipped 46.7M units in 2025. The company claimed 16.4% of China’s smartphone market according to IDC. The result marks a symbolic victory for the Shenzhen giant. It spent three years rebuilding its mobile business after losing access to Google services and advanced chip supplies.
The annual win came despite marginal shipment declines from 2024’s 47.6M units. Huawei’s 1.9% YoY drop actually outperformed the overall market’s 0.6% contraction. This suggests the brand maintained pricing power even as volumes softened.
Market share became the real battleground as total demand stagnated. Huawei’s 16.4% compared favorably to its 16.6% share in 2024. This narrow compression preserved its lead over Apple and vivo.
The company achieved this through premium positioning with its Mate and Pura series. It targeted buyers willing to pay for domestic alternatives to foreign flagships.
The strategy reflects a broader shift in China’s smartphone landscape. Volume growth has evaporated. Brands now compete on margins rather than scale. Huawei’s ability to defend share while maintaining premium pricing validates its focus on loyal customers over market expansion.
Geopolitical factors continue shaping Huawei’s competitive position. US export controls still limit access to cutting-edge chipmaking technology. This forces reliance on older-generation semiconductors. Yet the brand has turned constraints into differentiation. It markets devices as symbols of technological self-sufficiency amid rising nationalism.
Apple dominates Q4 with iPhone 17 surge
Apple shipped 16M units in Q4 2025. The company captured 21.1% of quarterly sales according to IDC. The performance marked a 21.5% YoY surge. The iPhone 17 series launched in September powered this growth.
The quarterly dominance contrasts sharply with Apple’s full-year second-place finish. Annual shipments reached 46.2M units for 16.2% market share. This represented a modest 4.0% gain from 2024’s 44.4M. The divergence underscores Apple’s dependence on new product cycles to drive China growth.
iPhone 17 differentiation proved critical in converting buyers. While specific feature details were not disclosed in IDC’s report, Apple’s ability to grow share during a market contraction suggests strong perceived value. Premium pricing held firm despite broader deflationary pressures in consumer electronics.
The Q4 surge also highlights seasonal dynamics in China’s smartphone calendar. Apple typically concentrates China demand in fall quarters around new launches. Share then compresses in spring when local brands refresh their lineups. This year’s 21.5% Q4 growth suggests the pattern intensified as competitors pulled back from aggressive holiday promotions.
Profitability concerns reshaped competitive behavior across the industry in Q4. With memory chip costs climbing, most Chinese brands reduced shipments of budget models to protect margins. Apple faced no such pressure given its premium positioning. This allowed it to capture volume that might otherwise have gone to sub-2000 RMB devices.
vivo and Xiaomi diverge on growth trajectories
vivo held third place with 46.1M units shipped in 2025. This matched Apple’s 16.2% market share on rounded figures. But the Dongguan brand contracted 6.6% YoY from 49.3M units in 2024. This marked the steepest decline among top-five players.
The drop reflects strategic missteps in China’s evolving premium segment. vivo built its reputation on selfie cameras and celebrity endorsements targeting younger buyers. As competition intensified at higher price points, the brand struggled to justify premium pricing without breakthrough differentiation. Share erosion accelerated in the second half as subsidies faded. Buyers became more selective.
Xiaomi posted 4.3% YoY growth. This was the fastest expansion among major brands despite ranking fourth overall. The Beijing company shipped 43.8M units for 15.4% market share. This compared to 42.0M and 14.7% respectively in 2024.
Xiaomi’s performance validates its dual-brand strategy. The main Xiaomi line targets value-conscious buyers with competitive specs at aggressive prices. The Redmi sub-brand defends ultra-budget segments where other players are retreating.
Meanwhile, the high-end Xiaomi 15 series competes directly with Apple and Huawei flagships. It does so at lower volumes.
OPPO rounded out the top five with 43.4M units and 15.2% share. This represented a marginal 2.1% gain from 2024. The Guangdong brand maintained stable positioning by balancing online and offline channels. It avoided the sharp corrections seen at vivo.
The divergent trajectories expose vulnerability in China’s smartphone mid-tier. Brands without clear premium differentiation or cost leadership face compression from above and below. vivo’s struggles suggest incremental product updates no longer suffice when buyers can either stretch for flagships or step down to capable budget devices.
Rising costs force industry-wide profitability focus
Memory chip prices surged throughout 2025. This squeezed margins across the smartphone supply chain. DRAM and NAND costs climbed as datacentre demand from AI applications tightened global supply. Phone makers absorbed the impact through Q3 before adjusting strategies in Q4.
Chinese brands reduced budget shipments in the year’s final quarter to protect profitability. IDC noted most local players decreased output of entry-level models. They prioritized margin over volume as component costs escalated. The shift marked a reversal from previous years when brands competed fiercely for market share in sub-1500 RMB segments.
The pullback created space for Apple’s Q4 surge. With Chinese competitors shipping fewer low-end devices, buyers looking for reliable alternatives faced a narrower range of options. Some traded up to iPhones rather than settling for aging Android models. This contributed to Apple’s 21.5% quarterly growth.
Industry observers expect further market contraction in 2026 as cost pressures persist. IDC warned that China smartphone shipments may decline more significantly if memory prices continue climbing. The projection reflects manufacturers’ limited ability to pass costs to consumers in a deflationary environment.
Storage configurations became casualties of the cost crunch. Several brands reduced availability of 512GB and 1TB options on mid-range models. This pushed buyers toward 256GB variants with better margin profiles. Flagship devices maintained higher storage tiers but at increased prices. This compressed demand from cost-sensitive buyers.
Subsidy cliff exposes demand fragility
Subsidies drove early-2025 growth before exhausting allocated funds. China’s “guobao” consumer stimulus program overlapped with Lunar New Year shopping season. This created a brief surge in smartphone demand during Q1 and early Q2. Local governments offered rebates on electronics purchases to stimulate consumption amid economic uncertainty.
The boost proved unsustainable as regional funding depleted faster than anticipated. According to IDC, multiple provinces exhausted subsidy budgets by mid-year. This removed a key demand driver just as spring product cycles matured. The timing left brands with elevated inventory entering the traditionally weaker summer months.
Market dynamics shifted sharply in H2 2025. Without subsidy support, YoY comparisons turned negative. The pulled-forward demand from H1 created a tougher baseline. Replacement cycles lengthened as buyers who upgraded early sat out subsequent product launches. This compounded the volume decline.
The subsidy experience revealed limitations of stimulus-driven smartphone demand. Unlike categories such as home appliances where subsidies unlock pent-up replacement needs, phone buyers often shift purchase timing rather than creating net new demand. The 2025 pattern mirrored earlier subsidy programs that produced short-term spikes followed by extended troughs.
Policy uncertainty complicates 2026 planning for manufacturers. With no major subsidy program announced for the coming year, brands must assume normalized demand conditions. This conservative posture reinforces the industry’s margin-over-volume pivot as companies prepare for potential further contraction.
Others category dominance masks market fragmentation
Smaller brands collectively shipped 58.4M units in 2025. This represented 20.5% of China’s market according to IDC. The “Others” category actually ranked first by share. It exceeded Huawei’s 16.4% and the other individual leaders. But the aggregate figure obscures intense fragmentation among second-tier players.
The Others segment contracted 3.3% YoY from 60.4M units in 2024. This marked a sharper decline than the overall market’s 0.6% drop. The divergence suggests smaller brands bore disproportionate pressure as component costs rose and subsidies evaporated. Many lacked the scale to negotiate favorable supplier terms. They also lacked brand equity to command premium pricing.
Honor, Realme, and OnePlus likely comprise significant portions of the Others category. IDC did not break out individual sub-leaders. These brands compete primarily on value positioning. They offer flagship-adjacent specs at mid-tier prices. The strategy works during market expansions but becomes untenable when costs surge. Buyers polarize toward premium or ultra-budget extremes.
E-commerce specialists also populate the Others segment. Brands such as iQOO (vivo’s gaming sub-brand) and Redmi (Xiaomi’s value line, when reported separately) target online-first buyers. They use aggressive flash-sale tactics. Their performance depends heavily on platform promotions during shopping festivals. These softened in 2025 as e-commerce growth slowed.
The fragmented landscape creates consolidation pressure. With five brands commanding nearly 80% of shipments, remaining players fight over a shrinking pool. Profitability becomes nearly impossible for brands shipping fewer than 10M annual units. This suggests further exits or acquisitions ahead as the market matures.
2026 outlook: deeper contraction looms
China’s smartphone market faces intensifying headwinds entering 2026. IDC projects shipments may decline more significantly than 2025’s marginal 0.6% drop if current cost and demand trends persist. The warning reflects industry consensus that structural challenges now outweigh cyclical factors.
DRAM and NAND prices remain elevated despite corrections from 2023 peaks. AI infrastructure investments continue absorbing memory supply. This leaves consumer electronics as lower-priority customers. Phone makers cannot easily redesign products around cheaper components given storage and RAM requirements driven by operating system demands and user expectations.
Manufacturers confront difficult tradeoffs between volume and profitability. Maintaining shipments requires absorbing cost increases or passing them to consumers through price hikes. The former destroys margins. The latter suppresses demand in a deflationary economy where buyers have grown accustomed to declining electronics prices.
Replacement cycles continue extending as innovation plateaus. Flagship devices from 2022-2023 remain capable for most users. This reduces urgency to upgrade. The shift from 4G to 5G provided temporary stimulus. But no comparable technology transition appears imminent to drive mass device turnover.
Premium segment competition intensifies as brands chase profitability. With budget segments squeezed by cost pressures, manufacturers cluster around 3000-6000 RMB price points where margins improve. But this concentration creates overcrowding. It forces aggressive promotion to differentiate increasingly similar products.
The 2025 results showcase market maturation. China’s smartphone industry has transitioned from volume growth to margin focus. Success now requires defending share while maintaining pricing discipline. Component cost management becomes as critical as product innovation. Brands lacking scale advantages or premium positioning face existential pressure as consolidation accelerates through 2026.