iPhone Fails to Grab Lead in China Smartphone Market, Samsung Increases Lead With 24.3%
Apple may have had a big iPhone 4S launch with China Telecom just last week. But even with the latest iPhone 4S reaching Chinese shores (as if they ever left it at all, with iPhones being manufactured in China), Apple has been slipping in terms of market share in this country. With Samsung tripling its lead over Apple in the smartphone business, China will need to cater to more Chinese mobile networks soon.
Apple is currently leading the worldwide smartphone race, at least in the fourth quarter of 2011. China, however, might be a difficult market for Apple if it cannot meet up with the smartphone demand, especially through China Mobile, which is the country’s biggest mobile carrier.
The company has recently launched its iPhone 4S on a second carrier — China Telecom — which will help the Cupertino, CA based company gain inroads into the country’s almost 1 billion mobile subscriber base. But Apple has far from hit the motherlode in this market. China Mobile, the biggest mobile carrier with about 650 million subscribers, still does not support the iPhone — at least officially.
China Mobile uses the TD-SCDMA technology for high-speed mobile broadband connections. There are about 15 million iPhone users on the network, using unlocked devices. However, users have to contend with slow 2G speeds for mobile data connectivity, or connect using faster WiFI connections.
Apple currently has a 7.5% share of the country’s smartphone market. In contrast, Samsung boasts of a 24.3% market share, after having partnered with all three major mobile carriers since 2009.
A Growth Market
China is actually a potentially huge market for Apple. Analysts expect shipments of iPhone units to distributors in the country to increase 52% this year to 137 million iPhones, which is even bigger than the U.S. market. However, the extent to which China Telecom can help Apple achieve stellar sales figures is quite limited, says Gartner analyst Sandy Shen.
The 16.8% gap between Samsung’s and Apple’s market shares actually doubled from 3Q 2011 figures. And it’s not only Android-powered Samsung smartphones that Apple will have to contend with. Microsoft is also entering the market, with Windows Phone 7 “Tango” devices supporting China Mobile’s TD-SCDMA standard, as confirmed by network representatives.
There is talk that Apple is likely to hold off until China Mobile rolls out its TD-LTE network, which will be compatible with existing standards that the iPhone 4S uses. Still there is an opportunity cost if Apple decides to delay its potential partnership with China Mobile.
PC Magazine‘s David Murphy has suggested that Apple adopt chips that can support a variety of technologies — such as Qualcomm’s fifth-generation Gobi chipset — which can support standards like TD-SCDMA, TD-LTE, HSPA, EVDO and the like. Apple is not likely to let a potential 650 million users slip through their fingers and end up with Windows Phone 7 or Android, and might be pushing to launch a TD-SCDMA iPhone 4S soon.
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