Apple Closes First China Flagship Store Since 2008 Amid Market Decline

Apple's presence in the Greater China smartphone market is facing significant challenges in 2025, marked by declining market share and sales despite a brief rebound in Q2 driven by aggressive pricing and government subsidies. The company’s market share dropped to 15% amid rising competition from domestic brands like Huawei, Xiaomi, and Vivo, compounded by geopolitical tensions and pricing mismatches that made Apple’s premium devices less accessible to Chinese consumers. In response, Apple has adopted a “China plus one” strategy, diversifying its supply chain by shifting some production to India, Vietnam, and Malaysia to mitigate tariff risks and dependency on China for key components. Apple’s retreat from China’s retail scene is highlighted by the planned closure of its Dalian store, the first such closure since its 2008 entry, attributed to declining foot traffic and broader economic challenges, though the company plans to open a new store in Shenzhen to maintain its store count. Despite these struggles, Apple’s strategic adjustments—including price cuts, enhanced trade-in programs, and subsidy participation—helped boost shipments in Q2, but analysts caution these gains may be temporary in a market facing softening consumer sentiment and contraction. Overall, Apple’s evolving China strategy reflects a balancing act between maintaining premium brand positioning and adapting to a fiercely competitive and changing market landscape.