The introduction of the iPhone 16e, priced at $599, further expanded Apple's market reach by appealing to budget-conscious consumers and performed strongly in its first full month of sales.

Government subsidies in May also played a role in boosting consumer spending and local production, although analysts warn that these incentives may diminish later in 2025, potentially revealing weak demand.

Despite the sales increase, the overall smartphone market in China remains challenging, with consumer spending during the 618 festival showing flat growth compared to the previous year.

Apple's iPhone 16 series saw a significant sales surge in May 2025, largely due to strategic price cuts made ahead of China's 618 shopping festival, particularly benefiting the iPhone 16 Pro and Pro Max models.

Discounts reaching up to $351 on platforms like JD.com and Alibaba's Tmall contributed to these models becoming top bestsellers, showcasing Apple's effective timing in capitalizing on consumer enthusiasm during major shopping events.

This resurgence in sales is a notable turnaround for Apple, which faced a 17% sales decline in 2024, indicating the company's resilience and adaptability in a complex market.

Overall, the success of the iPhone 16 in the second quarter of 2025 underscores Apple's ability to regain ground in China through strategic pricing and a diversified product lineup.

Apple faces ongoing challenges, particularly the lack of local AI features in China due to the absence of a local AI partner, while competitors leverage AI to attract buyers.

Intense competition from local brands like Huawei, which is projected to see a 12% sales growth in Q2 2025, as well as Xiaomi, Oppo, and Vivo, all targeting price-sensitive customers, adds pressure on Apple.

To mitigate risks from U.S.-China trade tensions, Apple has diversified its supply chain by increasing production in India and Vietnam, with plans to manufacture most U.S.-bound iPhones in India by 2026.

Sustaining growth will require Apple to balance its premium brand image with broader market appeal, especially amidst fierce competition from lower-priced alternatives.