This year has been a rough one for Apple, to put it mildly. According to IDC, Samsung has reasserted itself as the leading smartphone provider in the first quarter of this year with 60.1 million units shipped versus 50.1 million units shipped by Apple.Ryan Reith, group vice president with IDC, was quoted as saying that the recovery of the smartphone market continues to move forward with optimism slowly building among top brands. While Apple managed to capture the top spot at the end of 2023, Samsung is now leading the way.Reith also said that the resurgence of Huawei in China, as well as notable gains from Xiaomi, Transsion, Oppo/OnePlus and Vivo, will likely have both Original Equipment Manufacturers (OEMs) – Apple and Samsung – looking for areas to expand and diversify.As the recovery progresses, he believes that the top companies will gain market share as the smaller brands struggle for positioning.Nabila Popal, research director with IDC’s worldwide tracker team, also noted that there is growth in value and average selling prices as consumers opt for more expensive devices knowing they will hold onto their devices longer.Supply chain dynamicsTim Cook, Apple’s CEO, was recently in Hanoi, Vietnam, which is a key manufacturing hub for the smartphone maker. The company is expected to boost its connections with local suppliers.Interestingly, the company has assembled $14 billion worth of iPhones in India in fiscal 2024, according to Bloomberg. It has been stated that the company now makes as much as 14 per cent, or about one in seven of its marquee devices in India.Foxconn reportedly assembled nearly 67 per cent, while Pegatron Corp made about 17 per cent of Apple’s India-made iPhones and Wistron Corp’s plant in the southern Indian state of Karnataka made the remaining share, according to the Bloomberg report. It has been reported that the company is looking to diversify its supply chain beyond China amid geopolitical tensions between Beijing and Washington, even as China remains the largest hub for iPhone production.The Chinese marketIn March, Apple opened its newest store in Shanghai located next to the landmark Jing’an Temple. The store offers the community a gathering place for special events, as well as a one-of-a-kind shopping destination.However, according to Arthur Guo, senior market analyst for client system research at IDC China, the opening of this flagship store will not bring a significant sales increase in the short term.“The pressure faced by Apple comes from various aspects, including limited product upgrades and decreased attractiveness, as well as competitive pressure from Android competitors,” he told Inside Retail.Rather, he said, Apple’s decision to open a large flagship store is based on long-term planning and will not be affected by short-term external factors.Apple doesn’t discount products in its stores but it’s possible to find discounted iPhones online and most consumers are still looking for cheaper channels to purchase.Considering the complexities of the Chinese market, Guo believes that the company needs to enhance product competitiveness and add more innovative features, as simple price reduction promotions are only effective in the short term.For instance, he noted that Chinese smartphone brands have outpaced Apple in certain areas, such as foldable and AI features as well as fast charging. “So, the most important thing for Apple is to make more upgrades in its products,” he stressed.Still, in the context of Apple’s broader global strategy, Gua said the opening of the Shanghai flagship store indicates that China is still one of Apple’s most important markets.“The store may play a better role in brand promotion and provide better services to users in an offline sense,” he opined.Hitting a rough patchIn addition to these challenges, Apple is also facing a landmark antitrust lawsuit brought by the US Department of Justice, that accuses it of monopolizing the smartphone market, which has hurt rivals and driven up prices for consumers.This comes amid greater scrutiny of tech giants, with Alphabet’s Google, Meta Platforms and Amazon.com also being sued by regulators in recent years.Attorney General Merrick Garland was quoted as saying that consumers should not have to pay higher prices because companies violate antitrust laws.The complaint alleges that Apple has blocked innovative super apps, suppressed mobile cloud streaming services, excluded cross-platform messaging apps, diminished the functionality of non-Apple smartwatches and limited third-party digital wallets.The complaint also alleges that Apple’s conduct extends beyond these examples, affecting web browsers, video communication, news subscriptions, entertainment, automotive services, advertising and location services.In the 2023 fiscal year, Apple generated annual net revenues of $383 billion and a net income of $97 billion. According to the US Department of Justice, the company’s net income exceeds any other company in the Fortune 500 and the gross domestic products of more than 100 countries.