Apple sees iPhone share fall in China

27 August 2012

BEIJING: Apple, the electronics giant, saw its market share almost halve in China's smartphone category in the last quarter, as shoppers waited for the new iPhone 5 and its rivals improved their devices.

IDC, the insights provider, reported that Apple's proportion of sales declined from 19% in the first quarter of this year to 10% in the second.

"There are two things in play," TZ Wong, an analyst at IDC, told Reuters. "One is seasonal, people know the new phone is coming. And the second is that the alternatives are becoming much more attractive than a year ago. The iPhone didn't change much over the year."

Samsung, the Korean firm currently involved in a high-profile legal battle with Apple, registered the strongest total overall on 19%, although this was down by two percentage points quarter on quarter.

Lenovo, the indigenous technology company, was the second largest player in the sector in Q2, on 11% of sales. This compared with figures of between 5% and 8% three months earlier.

Two further Chinese organisations followed next in the rankings, as ZTE posted 10% on this metric, and Huawei logged 9%

According to Wong, the rise of local brands could continue, due to their extensive marketing efforts and links with China Mobile, China Unicom and China Telecom, the country's three authorised carriers.

"In the mid- to long-term, it's very possible they will start to dominate four of the top five, leaving Samsung as the only one standing," he said. "At that point, even Samsung will start to feel the pressure."

Looking more broadly, smartphones overtook feature phones in terms of market share for the first time in China during the last quarter, contributing 51% of the 87m gadgets purchased, IDC stated.

Estimates from Gartner, another research company, suggested that Apple's share of smartphone sales stood at 12% between April and June, measured against 17% from January to March.

"It's such an important market because of the volume and the growth rate, which are so attractive for chipset vendors ... so we're seeing a lot of competition," James Shen, vice president, business development, at Qualcomm, the chipmaker, said.

Data sourced from Retuers, Dow Jones; additional content by Warc staff