Apple’s reign as the leading smartphone seller in China ended in 2024, as domestic brands Vivo and Huawei overtook the iPhone maker, according to data from research firm Canalys reported by Reuters.

Apple experienced its largest-ever annual sales decline in China, with shipments falling 17% for the year. The downturn was consistent across all four quarters, including a sharp 25% drop in the final quarter.

Vivo led the market with a 17% share, Huawei followed with 16%, and Apple secured 15%, dropping to third place.

Canalys analyst Toby Zhu highlighted several challenges impacting Apple’s performance. The absence of artificial intelligence features in the latest iPhones sold in China has hurt their appeal.

ChatGPT, a prominent AI platform, is not available in the country, reducing the competitiveness of Apple devices.

Huawei’s consistent flagship launches and the rise of foldable smartphones by brands like Vivo and Xiaomi have intensified competition in the premium segment. Android brands are also successfully building consumer loyalty through innovation, further challenging Apple’s premium positioning.

To counter the decline, Apple resorted to rare price cuts. From January 4 to 7, the company ran a four-day promotion offering discounts of up to 500 yuan ($68.50) on its iPhone 16 models. Major e-commerce platforms like Alibaba’s Tmall offered discounts of up to 1,000 yuan ($137) on the latest iPhones.