In the final three months of 2018, shipments of Apple's iPhone dropped 19.9 percent year-over-year while Xiaomi saw its shipments slashed by more than a third compared to the same period a year earlier.
It wasn't just Apple that got whacked, though, as China's entire smartphone market shrunk almost 10% in the quarter, lending credence to Apple officials saying that the drop was related to overall conditions in China.
IDC said the iPhone's high price specifically "led to the decline of Apple's domestic market", while the increased strength of Huawei's brand and its flagship phone's "excellent technology'" helped it continue to widen the gap over Apple.
The US-based company's revenue from the iPhone slid 15 percent in the October to December period.
The smartphone users of brands like Apple is now contending with a plateauing global market after years of breakneck growth. A slowing economy, lengthening replacement times and the iPhone's hefty price tag contributed to the U.S. giant's decline, IDC said according to a Bloomberg report said.
Apple had warned of poor sales in the country weeks ago, an announcement which caused several electronics retailers including Alibaba-backed Suning and JD.com to slash the prices of iPhones sold in their stores.More news: Shannon Gabriel suspended for four ODIs over Joe Root sledging incident
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Even Nicole Peng, a senior director at Canalys believes that "Apple doesn't have a good go-to market strategy that fits the rapidly changing Chinese market".
Apple said its services division, which includes iCloud, the App Store and Apple Pay, saw revenue advance to $10.9 billion, up 19 percent over the prior year.
Apple reported a 27 percent decline in revenue from China late last month. "Apple didn't seem to change its Chinese marketing plans". The Chinese slowdown was also the driving factor behind Apple's first revenue outlook cut in nearly two decades.
Huawei had briefly trumped Apple to get to the No. 2 spot in the world.
Xiaomi saw a 34.9% fall in shipments due to inventory corrections and an internal restructuring, while Huawei's unit shipments rose by 23.3%, said IDC.
IDC says the high prices of the new iPhones had a major impact on sales of Apple's smartphones.