in developed economies, Mr. Lamba said.

Apple may boost its China sales when the new iPhone arrives later this year, aided by the growing popularity of the App Store and customers' tendency to upgrade their handsets every two years. That's one reason why Huawei and Oppo introduced their flagship phones earlier this year -- to get a head start on Apple.

After last year's surge in Chinese phone sales, Apple has reaped the benefit in its App Store, with China overtaking Japan to become the second-biggest source of spending in the shop for mobile games, services, music and more, according to researcher AppAnnie. Once customers have paid to download programs from the marketplace, they are more likely to continue to buy Apple hardware to preserve those purchases. The iPhone 6S,released in September, came too soon after the original iPhone 6 model in 2014 to encourage upgrades.

"In China it's about a two-year upgrade cycle," said Lauren Guenveur, an analyst at Kantar. "They will probably upgrade with the new iPhone 7 where they didn't with the 6S and 6S Plus."

Cost, however, is a mounting issue. While a 16 gigabyte iPhone 6S starts at 5,288 yuan, Huawei's top-of-the-range P9 costs 3,688 yuan, and includes 64 GB of storage, a fingerprint scanner and front and rear cameras.

"It is a fairly premium phone compared to the other models but it is a relatively lower price compared to the iPhone," said Ms. Guenveur. "There is also a sense of pride of being a Chinese phone user and owning a Chinese phone."

The smartphone market