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iPhone doing well in China, but share is stunted in the largest smartphone market

Posted: , by Maxwell R.

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iPhone doing well in China, but share is stunted in the largest smartphone market
Imagine a market so big, that even with phenomenal popularity and growth of your own product, the impact is negligible.

That is the position Apple is finding itself in with the world’s largest smartphone market. With smartphone shipments increasing 30% quarter over quarter, Apple’s market share is creeping up about half-a-percentage point for the same period. Indeed, Apple sold over 2 million iPhones in the opening weekend in China late last year.

Despite that, Apple does not even make the top five list of manufacturers. According to research done by Canalys, Apple’s growth in China is being held back by lack of a low-priced device and lack of a deal to offer its handset through the country’s largest carrier, China Mobile.

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Is this Apple's "budget iPhone" destined solely for China and India?

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The top player in China is Samsung with 16% market share and rounding out the rest of the top five are all Chinese companies, Lenovo in second, Yulong Computer Telecommunication Scientific, Huawei and ZTE. During the fourth quarter, over 65 million smartphones shipped in China, however the average cost of those devices was only $79. All the top market leaders have low-cost options for their customers.

We have seen our share of rumors over an affordable entry-level type iPhone, but nothing has really developed from them. However, Apple was just granted a patent in late January (patent number 8,364,032) for what might be a low-end device. There is only one bland drawing on hand, but it may be what Apple has in mind to make a grab at China (and possibly India), plastic, low-spec CPU, non-Retina display, and basic form factor.

Apple does not have much of a choice if it wants to make a bigger dent in China. Average purchasing power in China is a fraction of that in other industrialized nations. Meaning that $400 iPhones will not sell to the masses, but $100-150 iPhones just might.

sources: CIO and The Daily Mail

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posted on 08 Feb 2013, 03:31 4

1. thelegend6657 (unregistered)

The gap between the rich and the poor is very big in china .

posted on 08 Feb 2013, 05:12

2. anywherehome (Posts: 971; Member since: 13 Dec 2011)

and the rich buy SGS3....just a few old people buy just an iConboard

posted on 08 Feb 2013, 05:17 1

3. thelegend6657 (unregistered)

Actually you are wrong . The rich prefer the iPhone because its a status symbol .
That's what the iPhone has become in china , a status symbol for the rich .

posted on 08 Feb 2013, 06:44

5. CanYouSeeTheLight (Posts: 1122; Member since: 05 Jul 2012)

Not only in China, in my country (Portugal) it also is a status symbol. A friend of mine bought one and these were his actual words "This phone is so pretty on the outside, but on the inside ... it is just awful."

posted on 08 Feb 2013, 09:37

8. rusticguy (Posts: 2828; Member since: 11 Aug 2012)

Yes that's why most of them hold it in such a manner that the guy on other side can see the logo ... just a piece to show off ... :)

posted on 08 Feb 2013, 07:04

6. anywherehome (Posts: 971; Member since: 13 Dec 2011)

ok, show me the stats of rich people and market share
I just don believe that :)
it is a symbol, but just overrated....and these phones use mainly who doesnt need a real smartphone

posted on 08 Feb 2013, 23:38

12. thelegend6657 (unregistered)

My fathers Chinese friend , came to Malaysia .
Bought 2 iPhone 5 before or was released in china .
Go back home and sell them double the price to finance his holiday in Malaysia

posted on 08 Feb 2013, 23:39

13. thelegend6657 (unregistered)

The elites in China are so Damn rich
In the high end area of Shanghai , so many supercars ...

posted on 08 Feb 2013, 05:22

4. nikenturd (unregistered)

What do the Chinese and the Indians have in common?

posted on 08 Feb 2013, 09:38 1

9. rusticguy (Posts: 2828; Member since: 11 Aug 2012)

They are smarter by and large when it comes to spending their money on smartphones ... don't care much for the logo on the phone

posted on 08 Feb 2013, 10:39

11. lovefist (unregistered)

True. They spend hard earned money wisely and doesnt view it as a tool to buy phones just to look cool unlike americans, remember hurricane sandy in NY? People still lined up for an ipad mini.. During a disaster!

posted on 08 Feb 2013, 09:24

7. roscuthiii (Posts: 2241; Member since: 18 Jul 2010)

Seriously, they got a patent for a rectangle inside a slightly larger rectangle?!

The only thing I could think of is edge-to-edge screen since the source article relays the budget model as still having a camera on back; that it would make this device the most edge-to-edge though I think I've seen. I don't think that would put this in the budget category at all.
Apple's never been one to play in the low-end market, so I don't think they'll start now. Although, you never know with Tim Cook at the helm now, he may want to go in another direction.

Some analyst needs to go back to analyst school.

posted on 08 Feb 2013, 10:07

10. Nikolas.Oliver (banned) (Posts: 1574; Member since: 01 Jul 2012)

DON'T ditch the retina display for the cheap iphone! The Chinese won't be able to read their elaborate "hanzi", jk

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