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China is important to Apple. The company's revenues in China rocketed 72 percent during the firm's fiscal second quarter and 112 percent last quarter, thanks to increased sales of the iPhone and other Apple products. But those revenues may have been greater, because a new report suggests Apple has been shoved down a notch by local brands Huawei and Xiaomi.

Canalys said Monday that, in the last three months, one in three phones sold were built by either Xiaomi or Huawei. Hauwei saw 48 percent growth during that time period and gained a 15.7 percent share of the market, just behind Xiaomi with the lion's chunk of the market with a 15.9 percent market share. Apple, Samsung and Vivo trailed, filling out the top five vendors in the region, though Canalys didn't break down the market share for those firms.

"The China smartphone market continues to mature, remaining stagnant quarter-on-quarter," Canlys analyst Jingwen Wang said. "Competition among major brands has never been so intense. Huawei recorded the highest smartphone shipments in its history without compromising its product margin or profitability. Apple and Samsung have both increased their sales activities in the China market, expanding rapidly in channel coverage through flagship stores and small to medium size phone retailers respectively. Xiaomi is under immense pressure to maintain its top position in the quarters to come."

Xiaomi and Huawei have done well particularly with low cost handsets that are priced lower than Apple's iPhones, and Apple and Samsung's focus on the market will likely push them to find new strategies to remain on top.