KUALA LUMPUR, Malaysia—Apple pulled off a rare feat in China two years ago. The iPhone became the country’s bestselling smartphone, surpassing a host of domestic rivals. But that reign is over—a casualty, in part, of the escalating U.S.-China technology Cold War. Apple has fallen from first to third in the country, dethroned by two Chinese companies, Vivo and Huawei, that offered similar features at lower costs as China’s economy slumped. Now Apple has a new offering in the world’s biggest smartphone market. Deliveries of its iPhone 16e, a cheaper version of its flagship device, will begin in China this week...