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Apple makes modest gains in Chinese phone share

updated 01:44 am EST, Fri February 1, 2013

Android still dominant, but without Google apps

A new study from Strategy Analytics says that Android continues to be the dominant platform for smartphones in China, with 86 percent of the market. However, Apple's share has risen from 7.5 percent a year ago to 12 percent at the end of 2012, and the December release of the iPhone 5 is expected to take further market share from Android in this quarter. Remarkably, only two percent of smartphones sold in China -- including "local" brands sold exclusively in China -- are anything other than Android or Apple devices.

Mainland China saw significant growth in the overall smartphone market, now up to 53 million units (a 64 percent year-over-year increase). However in a country where a single carrier can have more than 100 million subscribers, the market for smartphones can still be described as "nascent" with plenty of opportunity for change. Apple CEO Tim Cook has said as much during quarterly conference calls, with analysts, and reported that over two million iPhone 5s were sold in the first weekend of retail availability, with hundreds of thousands of reservations in addition to retail sales.

A factor that is keeping Apple from doing even better in the region is the lack of deal with the country's largest carrier, China Mobile. Though available to the other two largest carriers, China Mobile has a total customer base of over 703 million subscribers, and represents Apple's best opportunity to reach the majority of potential customers. Apple has been in discussions with China Mobile over a deal for years, with signs suggesting that it is finally close to signing a contract.

Interestingly, the Android version used in China is not the same as the various versions offered in the US and other countries. Due to China's state control of the Internet, no Google apps (such as GMail or Maps) are included in the Chinese version of Android. No doubt, this government control is part of what has caused the long delay between Apple and China Mobile.

In the meantime, Apple has worked to make iPhones available at more points of sale, increasing outlets by 10,000 over the same period a year ago, adding new Apple Stores in the country and increasing the number of "premium" resellers to 400. In its most recent earnings statement, the company said that overall sales (almost entirely iPhones and iPad, with some iPod and Mac sales added) increased to nearly $7 billion, up from $4 billion a year ago.

Apple CEO Tim Cook, who recently visited China again to meet with China Mobile and government officials there, said iPhone sales in the region had doubled from a year ago. Overall sales in the area Apple calls Greater China (including Hong Kong and Malaysia) totalled $7.3 billion in the December quarter. Analysts believe that Apple could sell around 40 million iPhones in 2013 in the entire Asia-Pacific region, but rarely offer guesses on how well the company will do specifically in China.

Due to the introduction of the iPhone 5 and the slow rollout of LTE service in some areas, the company is expected to do well over the next quarter or two, but if a deal with China Mobile is significantly delayed, Apple's chance of taking more market share away from market leader Samsung and other Android brands diminishes over time. Other players, such as Nokia, Microsoft and BlackBerry have all but given up on the possibility of penetrating the Chinese market in significant percentages.



By Electronista Staff
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