Apple iPhone sales slump in China

iPhone 5, Android variety and lack of Apple Stores blamed

Apple's share of China's lucrative smartphone market dramatically halved to just 10 percent in April-June 2012. China is Apple's second-largest market, and its where the iPhone is made.

Apple probably needn't worry too much, though, as analysts explain the slump as caused by Chinese customers waiting for the much-rumoured iPhone 5.

See also: Smartphone reviews

More worrying for Apple is the suggestion that Chinese customers are looking elsewhere to Android smartphones due to the similarity between the iPhone 4 and iPhone 4S.

"There are two things in play," said IDC analyst TZ Wong, referring to Apple's drop in ranking and market share.

"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."

Another reason for Apple's slipping iPhone sales in China is its lack of visibility on the high street.

Apple has just six stores in China, which has a population of 1.3 billion people - that's one retail store per 216 million Chinese citizens. London, by comparison, also has six Apple Stores but a population of just 8 million.

Apple had planned to have at least 25 stores in China by the end of this year.

See also: iPhone 5 release date

See also: iPad mini release date

IDC reported that during quarter two of this year the 44 million smartphone shipments accounted for 51 percent of China's total mobile imports of 87 million - meaning that, for the first time, smartphones outsold standard feature phones in China.

China is set to overtake the US as the world's biggest smartphone market this year, with demand "driven by generous handset subsidies offered by the three main carriers, increasingly tech-savvy consumers and more feature-packed and affordable products," says Reuters.

Android phone maker Samsung, behind the phenomenally successful Galaxy S3 smartphone, retained its number-one position in China. Its share did, however, dip from 21 percent to 19 percent. See: Samsung phone reviews

Local Chinese brands Lenovo and ZTE pushed Apple to fourth place from second, said IDC. Another Chinese mobile maker Huawei Technologies, which sells its G330D smartphone, came in fifth (down from third).

LePhone maker Lenovo - and the world's second-largest maker of personal computers behind HP - jumped from seventh to second place with 11 percent share.

Smartphone market share in China

1. Samsung

2. Lenovo

3. ZTE

4. Apple

5. Huawei

In the overall Chinese mobile phone market - counting both smartphones and feature phones -Samsung, Nokia and ZTE top the rankings for the second quarter, said IDC.

IDC's Wong told Reuters that it was "inevitable" that Chinese brands would gain more share due to their aggressive marketing and close ties with local carriers China Mobile, China Unicom and China Telecom.

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

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Simon Jary

PC Advisor (UK)
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