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Apple Falls From Top Spot As Chinese Smartphone Brands Xiaomi and Huawei Gobble Market Share 

As reported by Fortune via Yahoo Finance, Apple has slipped to second place in the global smartphone market after just one quarter of claiming the top spot. According to a report from research firm IDC, the iPhone manufacturer delivered 50.1 million units in Q1 2024, a 9.6% YoY(Year-Over-Year) drop, putting it behind Korea's Samsung, which sold 60.1 million units. The primary reason behind Apple's decline is the Chinese market, where consumers are turning to local champions like Xiaomi and Huawei. Nabila Popal, a research director for IDC's worldwide tracker team, said, "increased competition in China is a big part of Apple's decline in Q1". 

Apple now holds 17.3% of the global smartphone market, while Samsung has a 20.8% market share, even though its first-quarter shipments dropped by 0.7% YoY. Three Chinese smartphone manufacturers - Xiaomi, Transsion, and OPPO - complete the top five, with a combined market share of 32.7%, shipping 94.5 million units. Transsion, a budget-focused brand that has achieved success in emerging markets, shipped 85% more phones this quarter than a year ago.

Apple's decline is taking place at a time when the smartphone market as a whole is rebounding from a post-pandemic slump. Smartphone sales increased 7.8% to reach 289.4 million units, according to IDC. Ryan Reith, IDC's group VP for worldwide mobility and consumer device trackers, said in a statement, "smartphone recovery continues to move forward with market optimism slowly building among the top brands".

Apple's sales in China have dropped significantly. The company reported a 13% YoY drop in sales in China, one of its most important non-US markets, in the quarter ending Dec 31, 2023, even as global iPhone sales rose by 6%.

The slump is extending into 2024, with iPhone sales in China dropping by 24% in the first six weeks of the year compared to the same period a year ago, according to a March report from Counterpoint Research. 

Chinese consumers have not been eager to purchase Apple's new iPhone 15, despite both Apple and third-party resellers offering discounts just a few months after the model's release. Mengmeng Zhang, a senior analyst with Counterpoint, said, "consumers feel fine holding on to the older-generation iPhones for now".

Apple is also navigating regulatory scrutiny being presented by the Chinese government. Beijing reportedly banned the use of the iPhone by government officials as a means to further China’s drive for tech self-sufficiency. Microsoft Windows and Intel processors are also being met with the same challenges in Beijing. Huawei, one of Apple's major competitors, re-entered the premium smartphone market last year with the Mate 60 Pro, a 5G smartphone featuring a homegrown processor. 

Xiaomi, the world's third-largest seller of smartphones according to IDC, is also expanding into other markets. The Chinese smartphone producer introduced its first electric vehicle, the SU7, earlier this year, and Xiaomi has given notice that the waitlist may extend beyond half a year.

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