China’s smartphone market contracted 2% year on year in the second quarter of 2026, yet Huawei and Apple posted strong shipment growth. The contrast highlights how rising memory and storage costs are reshaping competition across the industry.
Huawei led the market with a 23% share after its shipments increased 24% from a year earlier. Apple’s shipments rose 23%, supported by the relatively stable pricing of the iPhone 17 series.
Leaders Gain in a Contracting Market
Huawei recorded its highest market share since the end of 2020 despite the broader market decline. Stable demand for the Enjoy 90 Pro Max and the successful launch of the Pura X Max supported its performance.
The Pura X Max also points to continued growth potential in the premium foldable segment. Its wide foldable format helped Huawei maintain momentum in a higher-value category.
| Brand | Q2 2026 Market Share | Year-on-Year Shipment Growth | Main Driver |
|---|---|---|---|
| Huawei | 23% | 24% | Enjoy 90 Pro Max and Pura X Max |
| Apple | — | 23% | Relatively stable iPhone 17 pricing |
Apple benefited as consumers faced the prospect of more expensive alternatives from Android brands. Gizmochina reported that some buyers brought forward their upgrade decisions amid expectations that iPhone prices could rise in the third quarter.
The iPhone 17 series therefore gained an advantage from price stability rather than a broad recovery in demand. In a market under cost pressure, predictable pricing can become a significant competitive factor.
Low-Cost Production Is Being Cut Back
Preliminary Counterpoint Research data identified higher memory and storage prices as a key pressure point in the second quarter. Manufacturers are increasingly prioritising profit margins over high production volumes in lower-priced segments.
Oppo, Vivo and Xiaomi have reportedly begun reducing production of entry-level devices. Each still relies on mass-market product lines to cushion the slowdown, including Oppo’s Reno 16, Vivo’s Y600 Pro and Xiaomi’s Redmi K90 series.
Many manufacturers were able to limit the immediate effect of cost inflation in the first half of 2026 by using memory inventory purchased more cheaply late last year. The pressure may become more visible in the second half when higher-cost components reach assembly lines.
That shift could lead to wider price increases for new smartphones, particularly in categories that are highly sensitive to production costs. Inventory management, price discipline and margin protection are becoming as important as shipment volume.
India Shows a Similar Affordability Problem
Cost pressure is not limited to China. Smartphone shipments in India fell 10% in the second quarter, the deepest decline in six years, while average device prices increased 15%.
Lower-priced phones were hit hardest, although premium devices remained more resilient. Vivo retained the top position in India, while Nothing achieved 105% growth through the Phone (4a).
Counterpoint Research expects India’s smartphone market to shrink 13% for the full year because of affordability concerns. The figures suggest that component inflation may become a wider global obstacle rather than a challenge confined to China.