Apple Appears To Have Put The Worst Behind It In China, Says Analyst — Xiaomi Now Faces Fresh Pressure From 2026 iPhone SE And Flagship Launches
News Summary
According to TF Securities analyst Ming-Chi Kuo, Apple Inc. appears to be regaining ground in China after months of slowing sales, with its iPhone business having "put the worst behind it." Kuo warns that Xiaomi Corp. will face renewed competition from Apple's 2026 iPhone SE and new high-end flagship series. Xiaomi's recently launched 17 Series standard model has underperformed expectations, leading to an estimated 20% shipment cut for the series, potentially falling below the 15 Series' 8 million units. Kuo suggests Xiaomi's competitive pressure will intensify significantly in 2026 with Apple's two new product launches, potentially squeezing Xiaomi's premium smartphone ambitions. Concurrently, Apple's iPhone 17 lineup, launched on September 19, 2025, in China and India, is generating strong demand, particularly for the Pro Max model. Analysts forecast Apple's iPhone shipments in China to rise 11% year-over-year in the second half of 2025, contributing to an expected 5% annual growth despite earlier declines.
Background
The Chinese smartphone market is one of the most competitive globally, with major brands like Apple, Xiaomi, and Huawei constantly vying for market share. In recent years, Apple has faced sales challenges in China due to various factors, including the rise of domestic brands and evolving consumer preferences. Xiaomi has been actively pursuing an uplift in its premium smartphone market position to reduce its reliance on the mid-to-low-end segments and directly compete with brands like Apple and Huawei. Its product launches, such as the latest 17 Series, are critical steps in executing this strategy.
In-Depth AI Insights
What does Apple's rebound in the Chinese market signify for its global supply chain and geopolitical risk management strategies? - Apple's strong recovery in China could, in the short term, solidify its reliance on the Chinese supply chain, as China remains a critical base for both production and sales. This contrasts with the broader global trend under the Trump administration to diversify supply chains and "de-risk." - In the long run, Apple will likely continue to balance its commercial interests in the Chinese market with the need to diversify risks amid geopolitical pressures, for example, by increasing production capacity in places like India, but the sheer scale of the Chinese market makes it difficult to fully replace. - Investors should closely monitor the evolution of U.S.-China trade and technology policies, as any policy shifts targeting major tech companies could quickly impact Apple's operations and profitability. How does the setback in Xiaomi's premiumization strategy impact its long-term valuation and investor confidence? - The underperformance of Xiaomi's 17 Series standard model directly hits the core of its premiumization strategy. If it fails to achieve breakthroughs with subsequent products (like the 18 Series) and its AI roadmap, investor confidence in its ability to effectively challenge Apple and Huawei will be eroded. - Brand perception and pricing power are crucial in the premium market. If Xiaomi is forced to cut prices during China's "Golden Week" holiday, it could further damage its brand image, making its foothold in the premium segment even more precarious. - Investors may re-evaluate Xiaomi's growth potential and adopt a more cautious stance on its ability to successfully transform into a tech company with strong brand premium, potentially leading to valuation pressure. Beyond product launches, what deeper consumer behavior trends are shaping the Chinese smartphone market landscape? - Chinese consumer demand for high-end flagship phones remains robust. Especially amid increasing economic uncertainty, consumers tend to invest in products with strong brand power, outstanding technological innovation, and good resale value, which benefits Apple. - Simultaneously, the mid-range market is highly competitive, and consumers are more sensitive to value for money. The underperformance of Xiaomi's 17 standard model may reflect higher consumer demands for product differentiation and brand value in this price segment. - Smartphone manufacturers' "AI roadmaps" are becoming a new competitive focal point. Growing consumer expectations for on-device AI capabilities mean that failure to effectively integrate and promote AI innovations could lead to market share loss, making future technological innovation key to gaining market share.