China Smartphone Sales Drop 13% During 618 Festival

Smartphone sales in China dropped 13% year-on-year during the month-long 618 shopping festival from May 26 to June 21, according to data from Counterpoint Research. Rising memory costs linked to rapid AI infrastructure expansion forced brands to raise prices and reduce discounts, though Huawei recorded a 19% sales increase during the period.

Why did smartphone sales fall during China’s 618 festival?

The decline in sales stems from a combination of higher retail prices and less aggressive promotional activity. According to Counterpoint Research, brands raised prices to offset climbing memory costs, which has left manufacturers with less room to offer the steep discounts typically seen during major shopping events.

Ivan Lam, senior analyst at Counterpoint Research, noted that both older and newer models from Chinese brands were priced higher than comparable models from a year ago. He added that discounts during this year’s 618 festival were generally less aggressive in both the size of price cuts and the range of products covered.

Weak consumer sentiment has also played a role. While the 618 festival has grown from a single-day event into a month-long campaign, major e-commerce platforms are struggling to generate previous levels of consumer excitement as appetite for non-essential spending remains low.

How did major brands like Huawei and Apple perform?

Huawei Technologies emerged as the outlier during the festival, leading the market with a 21% share. It was the only major brand to record year-on-year growth, with sales rising 19%. The brand’s Enjoy 90 Pro Max was its top-selling model, while the Mate 80 also saw strong performance supported by promotions.

Apple’s sales fell 9% compared to the previous year, though the company secured the No. 2 spot in the market. Apple achieved this by rolling out incentives approximately one month ahead of the June 18 peak. These incentives included savings of up to 2,000 yuan ($295) on the iPhone 17 Pro series through a combination of platform subsidies, trade-in deals, and official price cuts.

Despite these efforts, Apple’s sales remained lower than the previous year’s figures. Counterpoint Research suggests this was partly because promotions for the iPhone 16 series were more aggressive during the same period last year.

What is driving higher handset costs?

The surge in component costs is directly linked to the rapid build-out of AI infrastructure. As companies invest heavily in artificial intelligence, the demand for memory has increased, driving up the prices manufacturers must pay for essential handset components.

These higher costs have fundamentally changed the math for smartphone brands during sales festivals. Rather than using discounts to drive volume, brands are finding it difficult to maintain previous price points while absorbing the increased cost of memory.

What happens next for the Chinese smartphone market?

While the 618 festival provided a temporary recovery for smartphone sales in June compared to May, the long-term outlook remains cautious. Counterpoint Research indicated that the market is likely to enter a seasonal slowdown following the festival period.

Analysts predict that the market could see a double-digit decline in total shipments for the year. This projected downturn reflects the ongoing struggle to balance rising hardware costs against a consumer base that is increasingly hesitant to spend on non-essential electronics.