Days after pushing for sweeping AI chip export restriction, the Biden administration has added an additional 14 Chinese companies to its restricted trade list. This brings the full list up to 25 names, according to reporting from The Associate Press. Sophgo is, perhaps, the highest profile addition. An entity of Bitmain, the firm sparked international […]
Apple has faced growing challenges to the iPhone in China from local competitors.
Cheng Xin/Getty Images
Apple is battling to keep the iPhone relevant in China.
New figures indicate foreign-smartphone shipments to China almost halved in November.
Apple faces stiff competition from local smartphone makers like Huawei.
Apple's battle to keep the iPhone popular in China appears to be getting tougher.
Signs of fresh struggles for Apple came on Friday as the government-backed China Academy of Information and Communications Technology said foreign-smartphone shipments dropped by 47.4% year over year in November.
The drop to 3.04 million shipments of non-Chinese smartphones, including iPhones, followed a 44.3% drop in October.
The figures, first reported by Reuters, highlight Apple's continuing challenges in its most important international market. Apple's annual net sales have declined for two consecutive years in the Greater China region, where the company has built a vast supply-chain empire.
Among the biggest threats to Apple's iPhone sales in the country — which fell by almost 8%, to $66.9 billion, in its latest fiscal year — is the rise of new powerful smartphones from domestic competitors.
The Chinese tech giant Huawei has provided Apple with one of its biggest recent challenges in the form of its Mate 60 series of smartphones, introduced in 2023, and its Mate 70 series, released in November.
The Mate 60 series stunned the smartphone industry because of its inclusion of advanced chips made in China.
US export controls aimed to curtail Chinese access to advanced chips, but Huawei's inclusion of domestic-made chips with similar capabilities to US technology highlighted how quickly local companies in China were working to innovate past constraints.
Apple has been pushed to respond to the rising competition in China by introducing discounts to entice consumers. The company has announced discounts worth about $70 on its iPhone 16 Pro models, for instance, ahead of the Lunar New Year.
It also faces pressure to accelerate the rollout of its suite of generative-AI features to iPhones in China, where Apple Intelligence isn't yet available.
Apple did not immediately reply to a request for comment from Business Insider.
Huawei is set to launch a new series of smartphones that rely on domestic expertise.
Tingshu Wang/Reuters
Huawei is set to launch its new line of Mate 70 phones on Tuesday.
Its software and hardware have been developed with domestic expertise.
It marks a new era of self-sufficiency at a moment of tech division between the US and China.
Look no further than Huawei to get a sense of just how far apart the US and China are heading into a second Donald Trump presidency.
On Tuesday, the Shenzhen-based tech giant is set to unveil a slate of new smartphones — the Mate 70 series — that will be the most free they have ever been of Western software and hardware.
During his first term in the White House, the president-elect moved to block what he saw as a national security threat by wielding export controls and an executive order to cut the Chinese firm's ties to crucial US partners and suppliers.
President Joe Biden's outgoing administration continued this approach, which meant Huawei had to look closer to home for chips, operating systems, and apps.
This term, Trump will stare down a Huawei that's showing it's doing just fine without its US suppliers.
On the software side, all lingering remains of Huawei's former dependence on Android look set to be excised on the Mate 70 devices as they launch with HarmonyOS Next, an operating system built to run apps specific to Huawei's system.
Huawei first launched HarmonyOS in 2019 after being cut off from Google's powerful Android system. Early versions of the platform contained code from the Android Open Source Project, but HarmonyOS Next removes it all, making it a product solely of Huawei's own making.
Meanwhile, on the hardware side, Huawei is looking to raise the bar on performance by introducing a new made-in-China smartphone chip in some of the new Mate 70 models, according to the Wall Street Journal.
A performance leap with a domestic chip would be a big deal. The top-end version of the Mate 70 predecessor — the Mate 60 — stunned policymakers last year as its launch showed off capabilities that were once only possible to accomplish with equipment sourced in the US.
The Mate 60's pro model was reported to have an advanced chipset called Kirin 9000s, designed by Shenzhen-based HiSilicon and manufactured by state-backed semiconductor firm SMIC. It gave the phone 5G-like cellular capabilities, per a teardown by Bloomberg.
The Huawei Mate 60.
Wang Gang/Getty Images
Together, the software and hardware advances are a symbolic moment that shows how little effect efforts in Washington have had on squeezing a company dubbed a "national champion" by Beijing's mandarins since the 1990s.
Bad news for Apple
This growing self-sufficiency isn't going unnoticed.
Apple, which considers China its most important international market beyond the US, has seen iPhone sales suffer in the region as local consumers have gravitated toward handsets that are aggressively priced and give them a sense of national pride.
According to figures from research firm Counterpoint, Huawei held an 18% share of the Chinese smartphone market in the third quarter of this year, while Apple had a 14% share. Depending on the success of the Mate 70 phones, that gap could widen in the months ahead.
Apple CEO Tim Cook, for his part, wants to ensure that Chinese consumers remain dedicated to the iPhone maker, which has sold its smartphones there since 2009. This week, he is visiting the country for at least a third time this year to attend an industry conference.
During his trip, he will be acutely aware that iPhones face stiff competition in China. Back in 2009, no Chinese company had an answer to Steve Jobs' creation, and even if they did, they'd need to package it up with US technology. Huawei's Tuesday launch could well change that.
