27 Nov 2014 09:37 am

Categorized | Technology

Apple’s iPhone loses China market share

HONG KONG/BEIJING: Apple Inc’s share of China’s booming smartphone market slipped for a second straight quarter in October-December, as it lost ground to cheaper local brands and as some shoppers held off until after the iPhone 4S launch last month.

China, the world’s largest mobile phone market, has not been easy for Apple, which is grappling with a lawsuit from a local firm over the iPad name and issues at its suppliers’ factories over wages and working conditions.

With the number of mobile subscribers set to top 1 billion in China this year, there is cut-throat competition among South Korea’s Samsung Electronics Co Ltd, Nokia, Apple and local firms Huawei Technologies Co Ltd and ZTE Corp.

While Apple regained its top spot as the world’s largest smartphone vendor in the fourth quarter and for last year as a whole, it slipped to 5th place in China, overtaken by ZTE. Apple’s China smartphone market share slid to 7.5 percent from 10.4 percent in July-September.

In the last quarter, Samsung knocked Nokia off the top slot, taking 24.3 percent of the market, more than three times Apple’s share, data from research firm Gartner showed. Nokia’s market share more than halved last year, from above 40 percent in the first quarter to below one fifth by the fourth quarter.

“Chinese handset makers have been actively promoting their smartphones with China’s three telecoms operators, so we saw ZTE and Huawei gain significant market share,” said Taipei-based Gartner analyst CK Lu.

Gartner said this week it expected Apple’s iPhone market share to slip for a couple of quarters as the novelty of its latest 4S model wears off.

In the first quarter of last year, ZTE had a market share of just 3 percent, but ended 2011 ranked 4th with more than 11 percent market share.

Chinese firms are gradually shifting up towards the higher end of the market, unveiling more feature-packed smartphones.

“If you want to sell handsets to the mass market, a simple rule of thumb in China is that the handset price has to be close to 70 percent of the monthly salary,” said Jayesh Easwaramony, an analyst with Frost & Sullivan in Singapore.

“Today, an iPhone is more than two months salary.”

This, said Easwaramony, gives the likes of Huawei and ZTE the opportunity to cater to a mass market that is captivated by the iPhone, but doesn’t have the purchasing power for it.

VALUE FOR MONEY

“The quality of Huawei’s phones is quite high and it’s good value for money compared to the iPhone,” said Dale Dai, a 28-year-old sales executive from Beijing.

Dai, who uses his Huawei phone to write weibo, or Chinese microblogs, surf the Internet and make calls, recently bought a new Honor smartphone for 1,800 yuan ($290), almost a third of the price of a new iPhone 4S at 4,988 yuan.

But given the sheer size of the Chinese market, just targeting the highest end users should be enough for Apple, though it’s not always been a smooth ride.

Last month, shoppers in Beijing threw eggs at the Apple store and fought with police when they were told the iPhone 4S would not be on sale as scheduled.

In Shenzhen, some genuine iPhones and iPads are smuggled in from Hong Kong, while sellers also take advantage of Apple’s popularity by packaging fake iPhones in iPhone 5 boxes – even before the 4S was launched.

In Hong Kong, Apple resorted to an online lottery reservation system for the 4S model after crowd control issues disrupted initial sales.

Analysts expect Apple to stem its slide in market share in China by signing up another carrier.

China Unicom, the country’s No.2 telecoms operator, is currently the only carrier to officially carry the iPhone. It has not officially given its iPhone sales, but analysts estimate it has sold around 3 million iPhones since signing a contract with Apple in 2009.

China Telecom Corp Ltd, the third and smallest operator, is expected to be next to clinch a similar deal with Apple later this year, and analysts predict it would sell about 1.4 million iPhones this year if it can reach a deal with Apple by May, rising to 2-4 million new iPhone users in 2013. (KMW NEWS)

Leave a Reply

Editorial

Will Kashmir witness a NC-PDP Coalition in future?

Will Kashmir witness a NC-PDP Coalition in future? Politics is a game of dynamic changes within the realm of context and conditions. Jammu & Kashmir Polity has witnessed dramatic changes as in the recently concluded Lok Sabha elections BJP swept the entire Jammu and Ladakh Region while as People’s Democratic Party captured the electoral fort in the valley of Kashmir. With Assembly elections […]

Opinion

Modi’s Election Plan in Kashmir: Power Usurping the People

Modi’s Election Plan in Kashmir: Power Usurping the People By. Dr. Ghulam Nabi Fai “Whatever the (Indian) Government spokesman might have said before, or may say now, there has never been a free and fair election in the State of Jammu and Kashmir.” Jayaprakash Narayan, ‘India’s Conscience-Keeper.’ Hope and change the Modi way seems to have taken in the majority of India’s voters since […]

Advertisement

Twitter

Cricket