China's smartphone industry experienced a lackluster performance during the second quarter of the year 2025
China's smartphone market, once a global powerhouse, is facing challenges that have led to a contraction in the second quarter of 2025. According to recent data, the market shrank by 4% year-over-year to 69 million units, marking the first decline after six quarters of growth.
The slowdown is mainly attributed to economic uncertainty, trade tensions between the U.S. and China, and weak government stimulus. Macroeconomic uncertainty and disappointing government subsidies have contributed to weaker demand, while ongoing trade-policy friction between China and the U.S. has disrupted supply chains and production schedules, causing delays in product launches and reducing consumer confidence.
Moreover, surging raw material prices have led to higher costs for manufacturers, making it difficult to aggressively price new devices in China's price-sensitive market. As a result, many consumers are holding onto their smartphones longer, focusing on saving money, which has led to stronger sales predominantly for mid-range and budget phones, while premium smartphone sales have been under pressure.
Despite the market challenges, Huawei has managed to regain the top seller position after more than four years. The company shipped 12.5 million units, holding an 18.1% market share, but experienced a 3.4% year-on-year decrease. Apple, on the other hand, saw a slight decline in shipments (-1.3% YoY), shipping about 9.6 million iPhones. Apple fell to the fifth position in market share (13.9%).
Xiaomi bucked the trend, growing 3.4% year-on-year and shipping 10.4 million units, claiming a 15.1% share. Vivo, previously the leader, fell to second place with 11.9 million units, marking a steep 10.1% decline. OPPO followed with 10.7 million units, down by 5.0%.
The decline in smartphone shipments in China has also contributed to a global dip in smartphone purchases. The number of smartphones sold per 100 in the second quarter of 2025 was 96, as opposed to 100 in the same period last year. If the government subsidy program regains traction in the second half, it could give the Chinese smartphone market a short-term boost.
In conclusion, the combination of economic uncertainty, US-China trade tensions, high raw material costs, and subdued consumer demand are the main factors behind the contraction in China's smartphone market. While Huawei has made a strong comeback to the top, Apple and other brands face challenges. Real growth in the long run will come from brands that can quickly adapt to consumer demands.
The contraction in China's smartphone market can be largely attributed to economic uncertainty, ongoing trade tensions between China and the U.S., and weak government subsidies, resulting in reduced consumer confidence and disrupted supply chains. Furthermore, high raw material costs have made it difficult for manufacturers to aggressively price new devices in China's price-sensitive market, leading consumers to hold onto their smartphones longer and favor mid-range and budget phones.
