Apple Inc. reclaimed the leading position in China, with iPhone shipments surging 28% during the holiday quarter even as a critical memory chip shortage intensified, according to Counterpoint Research.
The latest iPhone 17 series attracted strong consumer demand, with Apple's devices representing one out of every five shipments in the December quarter, the research firm estimated. This growth came largely at the expense of Huawei Technologies Co. and Xiaomi Corp., both of which saw their shipments decline by double-digit percentages. Overall, shipments in the world's largest smartphone market contracted by 1.6%.
Companies ranging from Micron Technology Inc. to Xiaomi are increasingly issuing warnings about the unpredictable effects of a widening shortfall in the semiconductors used for data storage in devices. This shortage, which emerged after memory chip manufacturers allocated more capacity to produce high-end memory for Nvidia Corp.'s AI chips, is pushing prices upward and putting pressure on smaller players who struggle to secure long-term supply contracts.
"Looking ahead, memory prices are expected to rise further, increasing by 40%–50% in the first quarter of 2026, followed by an additional increase of approximately 20% in the second quarter of 2026," Counterpoint analysts wrote. "Smartphone OEMs are anticipated to optimize their product portfolios, with a specific focus on reducing their low-end models to protect profit margins."
Taiwan Semiconductor Manufacturing Co. CEO C.C. Wei recently emphasized the uneven impact of the memory crunch, noting that high-end smartphones have been largely insulated. Apple, whose entire product lineup occupies the premium segment of the market, is demonstrating the greatest resilience. Nonetheless, a new round of consumer subsidies in China is helping to mitigate cost pressures for manufacturers, Counterpoint noted.
For the full calendar year, Apple finished just slightly behind Huawei at the top of China's shipment rankings, with each company capturing roughly a 17% market share. The iPhone maker's shipments for 2025 increased by 7.5%. A notable setback was the new iPhone Air, which launched later in China than in other markets and failed to become a strong seller.
"The iPhone Air underperformed," Counterpoint analyst Ivan Lam stated. "The delayed launch and the compromises between achieving a thin design and including a robust feature set led to a slow start for the device."