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Consumer electronics giant Apple's iPhone might have outperformed domestic rivals in the Chinese market for the first time since May 2024, suggests data from investment bank Goldman Sachs. Apple benefited from reducing its iPhone prices ahead of a major smartphone shopping season in China, says Goldman, as it adds that the outperformance could be transitory due to a sequential and global decline in China's smartphone market.
Domestic Chinese Brand Smartphone Shipments Decelerated Faster In May Than Foreign Brands, Says Goldman Sachs
While Apple was the rare big technology stock that stood its ground after January's DeepSeek selloff, the shares have taken quite a beating on the market since then. The shares have lost 14% year-to-date despite recovering a major portion of their 23% drop in April following the Liberation Day tariff announcements.
The shares have been driven lower due to concerns about the firm's US revenue due to tariffs against China, overall sluggishness in the Chinese smartphone market and a perceived lack of progress with AI initiatives and Siri.
Goldman Sachs's latest note, which kept a Buy rating and a $253 share price target for Apple, outlines that May 2025 marked a rare ray of good hope for Apple's Chinese smartphone business. The bank cites data from the China Academy of Information and Communications Technology (CAICT) to outline that foreign-branded phones in China lagged the decline in the broader smartphone market by 12 percentage points. Foreign-branded phones are widely considered a proxy for Apple's Chinese sales due to the sizable portion of the market that it commands.
According to the details, while overall smartphone shipments declined by 22% annually in May, shipments of foreign-branded smartphones dipped by 10%. This marked the first time Apple and other foreign companies outpaced the broader market since May 2024, Goldman Sachs points out, and adds that the shift is potentially due to "reported greater discounting by Apple ahead of the 618 shopping period."
The 6.18 shopping period lasts for the first 18 days of July and commemorates the founding of Chinese eCommerce retailer JD. According to Goldman, "discounting in May allowed the iPhone 16 Pro (128 GB base storage) to qualify for domestic smartphone subsidies" and led to a demand uptick for the device.
However, Goldman believes that while foreign smartphone companies have benefited from the subsidies, long-term trends in the Chinese market might not work in their favor. It shares that along with the 22% annual decline, the smartphone market also shrunk by 5% sequentially in May, as Chinese consumers appear to be holding back on their smartphone purchases.
Yet, even though the market appears to be slowing, foreign-branded phones appear to be exhibiting mixed performance. The bank outlines that on "a month-over-month basis, foreign-branded phone shipments in China grew 29% yoy, just below the seasonal average of +33% m/m (average of May 2021-2024)," and adds that foreign smartphones gained market share in May 2025 over April 2025 and May 2024. These phones held a 19% market share in May, which was five percentage points higher than April's share and two points higher than May 2024.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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