For instance, Chinese telecom equipment maker Huawei, which in recent years expanded to the smartphone market, launched its P6 model in June, targeting high-end users but selling at a mere 2,688 yuan.

Huawei said on Wednesday that its first-half revenue was 113.8 billion yuan, up 10.8 percent year-on-year.

Meanwhile, the Beijing-based Xiaomi is selling high-quality smartphones at extremely low prices, usually below 2,000 yuan. Xiaomi said it sold more than 7 million smartphones in the first half.

But Apple still has ways to protect its status as a major player in China, said Xiang Ligang, a telecom industry insider.

Xiang said that Apple will likely quicken the pace of its collaboration talks with China Mobile Ltd, the nation's biggest telecom operator, to boost iPhone sales.

China Mobile and Apple have been in talks for years, but the two have yet to reach an agreement. Some industry sources said that the two companies will likely start cooperating soon, since all the preliminary work is done.