Apple shuts flagship China store as iPhone loses ground to Huawei, Xiaomi

Dubai: Apple is closing one of its two retail stores in the Chinese city of Dalian next week — and while it may seem like a minor operational move, it points to something much bigger.

The decision marks the US tech giant’s first-ever closure of a directly operated store on the Chinese mainland, and comes amid a mix of declining iPhone sales, a changing retail environment, and intensifying competition from homegrown tech giants.

The store, located in the Parkland mall — now rebranded Intime City — will shut its doors on August 9, leaving Apple with just one outlet in Dalian, a city of 7.5 million people. The remaining store is located 10 minutes away in Olympia 66.

Apple says the closure is due to “operational changes” at the mall, and other international retailers have also moved out. But the timing is hard to ignore: in Q2 2024, Apple’s China sales fell 2.3% to $16 billion — short of analyst expectations — as more Chinese consumers shift to domestic smartphone brands.

It’s not just one slow quarter. Apple’s sales in Greater China dropped 8% last year to $66.95 billion — still enormous, but noticeably below its 2022 peak. And in a country where sentiment and nationalism play into purchasing decisions, local brands like Huawei, Xiaomi, Vivo, and Oppo are winning back customers.

In fact, Huawei reclaimed the top spot in China’s smartphone market in Q2 2024. Vivo followed with 11.8 million phones shipped (17% market share), and Oppo and Xiaomi were close behind. Apple, meanwhile, shipped 10.1 million iPhones — tying with Xiaomi at a 15% market share and rounding out the top five.

These numbers reflect a deeper shift in the Chinese market. With the economy facing deflation, weaker retail sales, and falling property values, consumers are rethinking big-ticket purchases — and increasingly opting for “Made in China” alternatives that offer high specs at lower prices.

Despite the Dalian shutdown, Apple insists it remains committed to China, where it still operates 57 stores across Greater China — including Hong Kong, Macau, and Taiwan. A new Apple store is set to open in Shenzhen on August 16, indicating a more selective and strategic approach to retail in the region.

Employees affected by the Dalian closure will be offered roles at other locations, according to Apple.

Still, the bigger story is clear: China is no longer the unshakeable growth engine it once was for Apple. With rising local competition and a shifting economic mood, the iPhone’s hold on Chinese consumers may be slipping — and that could force Apple to rethink how it does business in its second-largest market.