China Sales Fall
China's 618 smartphone sales fall 13% as rising memory costs limit brand discounts.
China's smartphone market took a sharp hit during the 618 shopping festival, with sales falling 13% compared to the same period last year, according to Reuters. Rising memory chip costs squeezed brands' profit margins, leaving them with far less room to offer the steep discounts that typically drive festival sales.
The 618 festival — one of China's biggest annual shopping events — usually sparks a buying frenzy driven by heavy promotions. This year, that playbook largely failed, as higher component costs made big price cuts too expensive for most brands to sustain, Reuters reported.
Huawei Stands Alone as the Only Brand to Grow
Huawei was the one clear winner during the festival. The company captured a 21% market share — the largest of any brand — and posted a 19% year-on-year sales increase, according to Yahoo Finance. Every other major Chinese brand saw double-digit declines.
Huawei's strong performance stands in contrast to rivals like Xiaomi, Oppo, and Vivo, which all suffered steep drops. Fewer promotional deals meant consumers had less incentive to buy, and most brands could not absorb the added costs to fund discounts, Yahoo Finance reported.
Apple Sales Still Lag Despite Aggressive iPhone 16 Deals
Apple was not immune to the slowdown. Despite running aggressive promotions for the iPhone 16 series, Apple's sales during 618 still came in below last year's numbers, according to Reuters. The discounts drew some buyers, but not enough to offset the broader market weakness.
Apple's struggle highlights how difficult the Chinese smartphone market has become. Even heavy price cuts on a flagship product like the iPhone 16 failed to spark a meaningful rebound. Competition from Huawei and other domestic brands continues to pressure Apple's position in the country.
Memory Chip Costs Are Killing the Discount Model
The core problem is rising memory costs. Memory chips are a key part of every smartphone. When those costs go up, brands make less money on each device they sell. That makes it much harder to slash prices during sales events like 618, Reuters explained.
In past years, brands could offer discounts of hundreds of yuan and still turn a profit. This year, that math no longer worked. The result was a quieter festival with far fewer eye-catching deals — and far fewer phones sold, according to Yahoo Finance.
Counterpoint Warns of Double-Digit Annual Shipment Decline
Research firm Counterpoint Research is predicting more pain ahead. The firm forecasts a seasonal slowdown following 618 and expects China smartphone shipments to fall by double digits for the full year, according to Reuters. That would mark a significant step back for one of the world's largest phone markets.
The combination of high component costs, weak consumer demand, and fewer promotions paints a tough picture for the second half of 2024. Unless memory prices fall or consumer confidence picks up, brands will continue to struggle to move devices at scale in China, Yahoo Finance noted.
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