This is not investment advice. The author has no position in any of the stocks mentioned.
According to data from Goldman Sachs, Apple’s iPhone has managed to outperform domestic competitors in the Chinese market for the first time since May 2024. This development emerges as Apple strategically reduces its iPhone prices ahead of the significant smartphone shopping season in China. However, Goldman cautions that this outperformance may be temporary, attributing it to a broader global decline in the Chinese smartphone market.
Domestic Chinese Smartphone Shipments Decline More Rapidly Than Foreign Brands, According to Goldman Sachs
Amidst the aftermath of January’s DeepSeek selloff, Apple stood out as one of the few major technology stocks to maintain its ground. Despite this resilience, the company’s shares have faced considerable downward pressure, losing 14% year-to-date despite a partial recovery from a previous 23% drop in April related to tariff announcements on Liberation Day.
Various factors have contributed to this decline, including concerns about US revenue impacts due to tariffs on China, a general slowdown in the Chinese smartphone market, and perceived stagnation in the development of artificial intelligence (AI) initiatives, including Siri.
Goldman Sachs’ recent analysis maintains a “Buy”rating and sets a price target of $253 for Apple’s shares. Notably, the report highlights May 2025 as a beacon of hope for Apple’s Chinese operations. Citing data from the China Academy of Information and Communications Technology (CAICT), the bank notes that foreign-branded smartphones in China experienced a lesser decline—12 percentage points better than the overall smartphone market downturn.
Details reveal that total smartphone shipments dropped by 22% annually in May, while foreign-branded phones saw a more moderate decline of 10%.This marked a significant shift as Apple and other international brands began to outstrip the broader market’s performance for the first time since May 2024. Goldman attributes this gain to Apple’s increased discounting strategies ahead of the upcoming 6.18 shopping period.
The 6.18 shopping festival, which lasts through the first 18 days of July, celebrates the anniversary of Chinese eCommerce titan JD. Goldman asserts that the discounts in May enabled the iPhone 16 Pro (128 GB base storage) to qualify for domestic smartphone subsidies, thereby stimulating demand for the device.
Despite these positive indicators for foreign smartphone companies in the short term, Goldman shares reservations regarding long-term trends in the Chinese market. They point out that alongside the 22% annual decline, the market faced a 5% sequential contraction in May, indicating that Chinese consumers may be delaying new smartphone acquisitions.
Nevertheless, the performance of foreign-branded phones shows mixed results. On a month-over-month basis, shipments of these phones grew by 29% year-over-year, closely aligning with the seasonal average of 33% growth observed from May 2021 to 2024. Additionally, foreign smartphones gained market share in May 2025 compared to both April 2025 and May 2024, securing a 19% market share—five percentage points above April and two points greater than the same month in the previous year.
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