However, with the country announcing its slowest economic growth since 2009, Apple said its sales fell 27 percent in the holiday quarter.
IDC said that Chinese tech company Huawei saw smartphone shipments rise 23.3 percent in the fourth quarter, allowing the firm to cut into Apple's market share.
However, as per the IDC report, the iPhone maker isn't the worst performing brand as Xiaomi Corp, another China-based company, fared even worse in the final months of previous year as its shipments plunged nearly 35 percent.
Counterpoint said iPhone sales in the fourth quarter, which includes India's electronics sales-heavy Diwali festival, fell 25 percent on the year, reducing total sales in 2018 to 1.7 million units from 3.2 million a year earlier. To compensate for the loss, Apple is trying to replace phone sales with revenue from services. The Chinese slowdown was also the driving factor behind Apple's first revenue outlook cut in nearly two decades. For the iPhone, revenue dropped 15 percent to $51.98 billion.
"When smartphones became a commodity for Chinese customers, multinationals need to adjust their overall sales and marketing strategies", Peng said. "Apple didn't seem to change its Chinese marketing plans". This is happening at a time when China's homegrown Huawei is tightening its grip in the market and recently dethroned Apple from the second position in the world's top selling smartphone brands. That's despite grappling with an unusually turbulent few months during which its finance chief was arrested on allegations of bank fraud, and the US marshalled its allies to try and block the company from selling next-generation networking equipment.
Apple no longer breaks out detailed numbers on iPhone shipments in its quarterly results, meaning that surveys and channel checks by the likes of IDC are often the clearest indicator of shifts in sales. Fifth-ranked Xiaomi, a Chinese name that experienced rapid growth just before its 2018 initial public offering, ran afoul of inventory corrections and an internal restructuring, IDC said.
"The domestic smartphone market environment in 2019 doesn't look very optimistic", IDC senior analyst Wang Xi said in the report.