Mainland China’s smartphone market just had its weakest third quarter since 2013, and Apple grew in it anyway. iPhone shipments rose 15% year over year to 11.6 million units in the third quarter of 2026, while total shipments across the market fell 12% to 59.3 million units.
Omdia’s latest research ties the decline to persistently high memory costs and buyers who are being careful about replacing their phones. The drop is far steeper than the 2% decline Omdia recorded in the second quarter, so the slowdown picked up speed over the summer.
IDC’s preliminary numbers put the decline at 15.4%, a steeper drop, though both firms have Apple gaining ground in a market that is getting smaller.
Apple and Huawei now hold 41% of the China smartphone market
Huawei stayed in front with 12.4 million units, up 18% year over year, for a 21% share. Apple took second place with 11.6 million units and a 20% share. Together the two vendors hold 41% of the market, about 10 percentage points more than a year ago.
Working backward from Omdia’s growth rates, Apple shipped about 10.1 million units in the third quarter of 2025 and Huawei about 10.5 million. Both added volume while the overall market lost roughly 8 million units.
Omdia credits Huawei’s position to a lineup that covers every price tier, a consistent pricing strategy, the evolving HarmonyOS platform and strong sales of its new wide-form-factor devices. Apple kept prices on its existing iPhone models steady ahead of the new launches, which encouraged retailers to stock up early and built momentum for the fourth-quarter launch window.
vivo came third, just ahead of OPPO, which includes OnePlus and realme. Each shipped about 9.0 million units for a 15% share. Xiaomi was fifth with 8.0 million units. Vendors outside the top two saw shipments fall as they worked down channel inventory, refreshed mid-range lines and put more weight on AI features.
Memory costs are pushing Chinese vendors toward premium phones
Hayden Hou, Principal Analyst at Omdia, says memory prices reached a near-term high in the third quarter and hit vendors unevenly. The same memory shortage has already led to reports that Apple may cut its 2026 hardware shipments.
Chinese vendors are responding by moving upmarket. Xiaomi dropped the standard model from its flagship numbered series this year, while OPPO and vivo added Pro Max models to their flagship lineups. At the other end, entry-level and mid-range phones are getting trimmed specs, fewer color options and a smaller set of core memory configurations.
The third quarter would normally be a peak period for flagship upgrades, with new iPhones and a wave of domestic flagship launches arriving together. Cost pressure kept shipments below expectations, and Omdia says protecting profit while keeping brand momentum is the main challenge for every vendor right now.
Apple’s Pro-only September launch opens a window for rivals
Omdia says Apple formally moved to launching only Pro models in September, with the standard and other models shifting to 2027. That changes Apple’s annual shipment pattern and the competitive windows available to domestic vendors, who may need to adjust launch schedules, resource allocation and product portfolios to take advantage.
The fourth quarter is the first real test of that schedule. Orders for the iPhone 18 Pro and iPhone 18 Pro Max were reportedly cut by at least 15% earlier this month as demand softened, which gives the quarter extra weight for Apple in China.
AI features could pull 28% of Chinese buyers to a different brand
Lucas Zhong, Senior Analyst at Omdia, says the AI race among Chinese phone makers has moved past hardware computing power and model size. The focus is now on operating system architecture, AI agents that can finish tasks on their own and integration across apps.
Deployment is still difficult, app permissions are restricted, there are no standard protocols for agents, and on-device computing power is limited. Most products are still moving from technical validation to large-scale commercial rollout, and Omdia expects vendors to need practical everyday use cases to get people replacing their phones.
Omdia’s consumer research finds that 28% of Chinese buyers would consider switching smartphone vendors for more advanced AI features. Omdia forecasts that mainland China smartphone shipments will fall about 7% year over year in 2026.
