China's smartphone shipments declined 4% YoY in Q1 amid memory shortages; Huawei's shipments grew 2% YoY for a 20% market share, iPhone grew 20% for a 19% share
Ivan is a Senior Research Analyst at Counterpoint Research, based in Hong Kong. He has more than 15 years of experience, with a major focus on mobile and network devices.
Context & Ripple Effects
China’s handset market had already turned negative in late 2025 as memory shortages raised device prices. That pressure followed a period in which Huawei gained share while Apple’s position was more volatile, including a sharp rebound in late 2025.
The Q1 result shows the downturn is not distributing evenly: the two leading brands expanded shipments even as the overall market contracted. Subsequent related coverage points to another declining quarter, making component availability and pricing a continuing constraint rather than a one-quarter disruption.
First-order effects
- Huawei retains the leading position in the reported quarter, while iPhone closes to within one percentage point of its share despite a smaller total market.
- Other smartphone vendors absorb most of the market’s volume decline, as memory-constrained demand shifts toward the two brands that still increased shipments.
Second-order effects
- Rivals face pressure to preserve volumes or margins when higher memory costs limit their ability to compete on price against Huawei and Apple.
- Handset makers and channel partners have a stronger incentive to prioritize memory allocation and higher-value models, because constrained components make low-margin volume harder to sustain.
Third-order effects
- If memory constraints persist, China’s smartphone market could become more concentrated around vendors with stronger component access, pricing power, and channel demand.
- The episode is part of a broader supply spillover risk: tight memory markets can transmit upstream hardware constraints into consumer-device pricing and shipment mix, even where end-demand is already soft.
The trend: Memory-supply pressure is increasingly acting as a market-share filter in mature smartphone markets, favoring vendors able to sustain shipments and pricing through component scarcity.