China's smartphone market weakened in the second quarter as manufacturers grappled with higher component expenses, according to data published by research firm IDC. Total shipments in the three months to June 30 fell 4.3% year-on-year to 66 million units, with most vendors recording declines.
Amid the broader downward trend, two companies stood out: Huawei and Apple. IDC's figures show Huawei increased shipments by 20% in Q2, while Apple achieved a 25% rise. Those gains were enough to drive meaningful adjustments in market share totals.
Huawei remained the market leader by share, expanding its slice of China sales to 22.6% in the quarter, up from 18.1% a year earlier. Apple moved into second place, with share rising to 18.1% from 13.9% a year ago. OPPO and Vivo were tied for the third-largest share positions, while Xiaomi held the fifth spot in the country's rankings.
IDC analysts attributed the divergent performance in part to pricing strategies. The firm said Apple and Huawei generally held prices steady during the quarter, while several of their rivals increased retail prices to reflect higher memory and other component costs. That contrast in approach, IDC noted, helped Apple and Huawei gain relative market traction.
The research firm also pointed to buyer behavior around Apple. Early signals from Apple about forthcoming price increases encouraged some consumers to advance planned iPhone purchases, a dynamic that bolstered sales alongside the company's brand strength.
Component inflation, particularly for memory chips, was cited as a primary driver of higher manufacturing costs in the period. IDC said memory and other component prices rose sharply this year, driven by outsized demand from the artificial intelligence industry, which tightened supply and pushed prices upward. Those cost pressures were then passed on to consumers by some manufacturers.
Looking forward, IDC warned that rising cost pressures are expected to hit smartphone manufacturers harder in the second half of 2026. The firm said inventories of earlier, lower-cost components had offered some temporary shelter from price increases, but that protection is unlikely to persist in the coming months. IDC further indicated the industry may face continued headwinds from the memory shortage into 2027, even as it offered measured optimism that the smartphone remains a core consumer electronics device.
Context and implications
The Q2 data point underscores a market in which tactical pricing and inventory positioning matter. Vendors that avoided raising prices during the quarter - notably Apple and Huawei - were able to expand shipments and market share, while competitors that passed on higher component costs to buyers saw demand weaken.
IDC's outlook suggests the near-term environment will remain challenging for manufacturers dependent on memory-intensive components, with cost pressures set to intensify later in 2026 and into 2027.