Smartphone use set to surge in China

20 October 2009

BEIJING: The number of smartphone users in China is set to treble in the next five years, and competition between both domestic and multinational manufacturers in this market now appears to be intensifying at an equally rapid rate.

According to figures from the country's government, there are almost 700 million mobile phone users in the world's most populous nation at present.

BDA China, the telecoms consultancy, has predicted that the amount of smartphones active in the fast-growing market will reach 116.2 million by 2013, around three times the current figure.

Apple, the US consumer electronics giant, will launch the iPhone in China this month, priced at around $735 (€491; £448), having forged an alliance with China Unicom.

BDA estimates that the Cupertino-based firm will sell some 5 million of these devices in the country in the next three years, and ultimately take a share of between 10% and 15% of the market.

It further suggests that there are already 1.5 million "grey market" iPhones in operation in China, alongside a huge number of counterfeit alternatives.

Piper Jaffray has similarly predicted that the BRIC economy will come to deliver around 10% of all iPhone revenues in the near future.

Gene Munster, an analyst at the consultancy, said "the Chinese love Apple. It represents something that a lot of them are striving for."

One major obstacle facing the American corporation is China Mobile, which currently holds a 73% share of the market, and is soon to launch the OPhone, powered by Google'sAndroid operating system.

Dell, Motorola, Samsung and HTC are among the manufacturers which have agreed to develop handsets for the state-owned telecoms provider.

Lenovo, the IT specialist, will introduce the first version of the OPhone in late October, and it is expected to cost considerably less than Apple's pioneering product.

Research in Motion, maker of the BlackBerry, is also set to forge a partnership with China Telecom to further develop its presence in the country.

David Wolf, president of Wolf Group Asia, the advisory firm, said "Apple is entering China at a level of competition that's never been seen before."

"If they think they can come here and ride the wave they've enjoyed the last two-and-a-half years, then they're going to get a rude awakening."

Data sourced from China Post; additional content by Warc staff