Has China Lost Its Taste for the iPhone?

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.

“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.

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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