China's smartphone market hit a rough patch during the 2026 May Day holiday. Rising memory costs pushed up handset prices, and consumers decided their current phones were good enough for now. According to Counterpoint Research, sales dropped 16% year over year during the two weeks surrounding the holiday.
The research firm pointed to higher memory prices as the main culprit. Those costs got passed along to buyers, making upgrades less appealing. Smartphone makers also pulled back on aggressive promotions, choosing to protect their profit margins instead of chasing volume. Chinese Android brands raised prices on older models by an average of 13% due to those mounting component costs. That could keep weighing on demand in the near term, though Counterpoint expects a modest recovery in early June when 618 shopping promotions kick in.
Huawei extended its lead in China's smartphone market, supported by strong demand for the Enjoy 90 Pro Max, which gained traction thanks to its battery life and value-focused positioning. The company has sustained weekly market share above 25% since April through stable pricing and solid sales of the Pura 90 Pro lineup and foldable Pura X Max. Huawei also kept offering promotions on older Nova 15 and Mate 80 models. While competitors raised prices, Huawei's domestic supply-chain advantage helped it capture additional market share.
Apple held its ground despite facing stronger competition from Chinese smartphone launches in April. Counterpoint said Apple posted 3% year-over-year growth during the holiday period. The iPhone 17 lineup entered a more normalized demand phase after a strong six-month run. But Apple still benefited from domestic brands raising prices because of memory cost inflation. Entry-level subsidies also helped Apple remain competitive in China during the quarter.
Apple shares were down 0.50% at $296.35 during premarket trading on Tuesday, approaching their 52-week high of $303.20.
