Apple (AAPL) Stock Gains Momentum as China iPhone Sales Soar 23% Despite Market Downturn

Key Highlights

• iPhone demand in China increased 23% during the initial nine weeks of 2026
• The broader Chinese smartphone sector contracted by 4% during the same timeframe
• Apple maintains pricing discipline, choosing to absorb margin pressure rather than increase prices
• Rising memory chip expenses are compelling Android manufacturers like OPPO and vivo to implement price hikes
• Apple’s efficient supply chain management provides competitive advantages against market rivals

Apple’s performance in China’s smartphone market is defying broader industry trends with remarkable strength. Fresh data from Counterpoint Research reveals iPhone demand surged 23% during the opening nine weeks of 2026, even as China’s overall smartphone sector contracted 4% year-over-year during the identical period.

Apple Inc., AAPL

Government-backed subsidy programs introduced at the beginning of the year haven’t managed to revive lackluster consumer spending industrywide. Apple, remarkably, has navigated past these headwinds successfully.

The impressive performance stems from aggressive e-commerce promotional campaigns combined with Apple’s qualification for government subsidies on the standard iPhone 17 variant. These elements have drawn increased numbers of Chinese buyers into Apple’s product ecosystem precisely when competitors face mounting challenges.

The current market turbulence centers on memory chip dynamics. Memory component demand has skyrocketed, predominantly fueled by artificial intelligence hardware requirements. This surge has elevated costs throughout the sector and compressed profit margins for smartphone manufacturers.

Chinese Android manufacturers OPPO and vivo have implemented price adjustments on select current models, taking effect this month. Counterpoint indicates these increases partly serve to gauge consumer sentiment ahead of upcoming product introductions.

Apple Maintains Pricing Discipline as Competitors Adjust

Apple is pursuing an alternative strategy. The company’s meticulously controlled supply chain infrastructure provides greater flexibility to absorb elevated memory costs internally rather than transferring them to customers.

“Apple is unlikely to follow suit, instead absorbing part of the margin pressure and using the situation to potentially expand its market share,” Counterpoint said in its report.

This tactical approach is delivering results. A 23% sales increase amid overall market decline reflects strategic execution rather than fortunate timing — it demonstrates the value of maintaining stable pricing when competitors face constraints.

Huawei, conversely, is executing its own tactical approach. The company relies on domestically sourced chip suppliers, which typically offer more competitive pricing compared to international memory producers. Counterpoint suggests this cost advantage could enable Huawei to compete more aggressively in budget and mid-tier market segments.

The memory component shortage is projected to continue throughout 2026. Counterpoint anticipates sustained pressure on the Chinese market from March through May, with potential temporary improvement during the mid-year “618” shopping event in June.

Apple’s Greater China Revenue Has Declined Recently

This sales momentum arrives at a strategic moment for Apple. Its Greater China revenue has experienced consistent decline over recent years — dropping from $74.2 billion in fiscal 2022 to $64.4 billion in 2025.

A 2023 governmental restriction on iPhone usage by Chinese government employees created headwinds. Intensified competition from Huawei and other domestic manufacturers added additional pressure.

The 23% sales growth in early 2026 doesn’t independently reverse the long-term trajectory, but it demonstrates Apple’s continued ability to drive significant volume when market conditions align favorably.

The memory cost pressures are also affecting Apple’s broader product portfolio. Micron Technology reported second-quarter revenue expansion of 196%, illustrating the dramatic surge in memory demand.

Apple introduced the MacBook Neo earlier this month at a $599 price point, establishing an accessible entry-level position for a new laptop series — notably, while competitors implement price increases.

The most recent Counterpoint data encompasses the first nine weeks of 2026 and was released Thursday, March 19.