China’s smartphone market started 2026 on a weak note, as shifting holiday promotions and last year’s subsidy surge weighed heavily on January sales, according to Counterpoint Research.
Subsidy Hangover Drags Down January Sales
China’s smartphone sales fell 23% year over year in January 2026, based on Counterpoint’s China Weekly Smartphone Sell-Out Tracker.
Analyst Ivan Lam attributed the sharp decline to a high base effect, as a government subsidy launched on Jan. 20 last year coincided with Lunar New Year promotions, pushing demand forward.
This year, lower subsidy intensity and subdued consumer sentiment limited any meaningful recovery, Lam said. As a result, most Chinese smartphone brands posted double-digit annual declines.
Huawei Leads Market Despite Sales Drop
Huawei secured the top position with a 19% market share, even though its sales declined 27% year over year, Lam noted.
The Nova series underperformed compared with last year, while the base Mate 80 model emerged as Huawei’s best-selling device in January.
To cushion the slowdown, Huawei intensified trade-in promotions during the subsidy period.
The company offered the highest evaluated trade-in prices across recycling platforms and added a 20% official upgrade subsidy on new purchases, helping stabilize overall performance, according to Lam.
Apple Stands Out As Sole Growth Driver
Apple Inc. (NASDAQ:AAPL) was the only major brand to record year-over-year growth in January, reaching its highest January market share in five years as the iPhone 17 series sustained strong demand, Lam said.
The base iPhone 17 now qualifies for government subsidies, boosting its value appeal and driving a 9% month-over-month increase in sales.
Apple has kept price cuts relatively modest so far, leaving room for further adjustments ahead of its next-generation launch, Lam added.
While other brands have yet to ramp up promotions fully, overall demand remains soft.
Counterpoint expects a more noticeable rebound in February, supported by seasonal purchasing around the Lunar New Year, traditionally one of China’s peak smartphone sales periods.
AAPL Price Action: Apple shares were down 0.95% at $259.24 at the time of publication on Friday, according to Benzinga Pro data.
Photo by Evolf via Shutterstock
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