TECH

China’s Smartphone Recovery Stalls as Subsidies Fade and Costs Rise

Published: Jan. 21, 2026 3:00 a.m. GMT+8

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Consumers select smartphones in Nanyang, Henan province. Photo: VCG

China’s smartphone market contracted in 2025, reversing a modest recovery from the prior year, as the momentum from government consumption subsidies dissipated in the second half. The downturn underscores the fragile state of consumer electronics demand in the world’s largest smartphone market and signals a challenging year ahead, with memory costs set to climb steeply.

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China’s smartphone shipments declined 0.6%-1% in 2025 to about 282-284 million units as government subsidy effects faded and memory prices rose.
Apple’s China shipments grew 4%-7.5%, closing in on Huawei’s lead, while Honor’s shipments fell 12.6%; global smartphone shipments rose about 2%.
Memory chip prices are projected to rise 40%-50% in early 2026, with IDC forecasting a noticeable contraction in China’s market and vendors streamlining product lines.

AI generated, for reference only

Who’s Who

Apple Inc.: Apple Inc. rebounded strongly in 2025 after a lackluster 2024. Its new iPhone lineup, launched in September, qualified for government subsidies due to its price point. This led to a 4% rise in shipments in mainland China, giving Apple a 16.2% market share—tied for second place. Counterpoint estimated a 7.5% growth for Apple.

Huawei Technologies Co. Ltd.: Huawei Technologies Co. Ltd. was the market leader in China's smartphone market in 2025, according to IDC data, holding a 16.4% share. Counterpoint Research also placed Huawei first, with a 16.9% market share, noting a 1.7% growth in its shipments.

Xiaomi Corp.: Xiaomi Corp. saw shipments grow by 4.3% in 2025, according to IDC data, placing it after Huawei and Apple in market share. However, Counterpoint Research noted a double-digit drop in Xiaomi's Q4 shipments, indicating intensified domestic competition and challenges in moving into higher-end segments, especially as global demand shifts towards premium products.

OPPO: OPPO saw 2.1% growth in shipments in 2025, according to IDC data. Counterpoint research shows OPPO following Huawei, Apple, Vivo, and Xiaomi in market share. While OPPO experienced a domestic recovery in the fourth quarter, it struggled with "tepid demand overseas."

Honor: Honor experienced a sharp 12.6% decline in shipments in the Chinese mainland's smartphone market. This places it among other brands like Vivo, which also saw a drop in shipments.

Vivo: Vivo tied with Apple for second place in the Chinese smartphone market in 2025, each holding a 16.2% share according to IDC data. However, Counterpoint Research reported a 6.7% drop in Vivo's shipments. Globally, Vivo leaned heavily on growth in India.

Samsung Electronics Co.: Samsung Electronics Co. is expected to navigate the upcoming challenges of soaring memory prices in 2026 better than some Chinese brands. This is attributed to its premium market positioning and robust supply chains, which are crucial for component procurement during a period of unprecedented memory shortage.

AI generated, for reference only

What Happened When

First half of 2025：: Subsidies for consumer electronics spurred growth in China’s smartphone market.

Second and third quarters of 2025：: A period of market adjustment occurred due to the discontinuous nature of government incentives.

Second half of 2025：: The momentum from government consumption subsidies dissipated, leading to a market contraction.

September 2025：: Apple launched a new iPhone lineup, doubling the base model’s storage while keeping the starting price at 5,999 yuan.

Fourth quarter of 2025：: Counterpoint Research reported a 1.6% drop in China’s smartphone shipments; Xiaomi saw a double-digit drop in worldwide fourth-quarter shipments.