Apple (AAPL.US) achieved a robust 23% increase in smartphone sales in China during the first nine weeks of 2026, defying a broader market contraction. This growth occurred as several Android manufacturers raised prices due to rising memory chip costs. Data released Thursday by market research firm Counterpoint indicates that China's overall smartphone market declined by 4% year-over-year from January to early March. Despite consumer subsidy programs introduced by the government at the start of the year, weak consumer demand was not effectively stimulated.
Apple's sales growth was primarily driven by discounts on e-commerce platforms and policy support that made its entry-level iPhone 17 model eligible for national subsidies. The report notes that Apple's stringent control over its supply chain grants it greater cost absorption capacity compared to rivals, enabling it to effectively withstand the impact of soaring memory chip prices. The market anticipates that Apple will maintain its current pricing strategy, while competitors are forced to increase prices. This dynamic is expected to allow Apple to further expand its market share.
Counterpoint analysts stated, "Apple is unlikely to follow the price hikes and will instead absorb some profit pressure, using this cost crisis to gain market share." Amid persistent increases in memory costs, Chinese Android vendors OPPO and vivo have announced price increases for some existing models effective this month. Counterpoint suggests that besides addressing cost pressures, this move aims to test consumer price sensitivity ahead of new product launches, providing a reference for pricing the next generation of devices.
Meanwhile, Huawei, due to its high reliance on local suppliers—whose procurement costs are typically lower than those of international memory chip manufacturers—has established an effective cost buffer. The agency added that Huawei is likely to leverage this advantage to capture more share in the mid-to-low-end market. Counterpoint forecasts that the Chinese market will remain under pressure from March to May. However, with the start of the "618" mid-year shopping festival in early June, large-scale promotional activities are expected to provide temporary relief. Nevertheless, memory chip cost pressures are projected to persist throughout 2026, forcing all handset manufacturers to make difficult trade-offs between cost control, profit maintenance, and shipment volume targets.
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