Tim Cook: China to become Apple's largest market

Cook plans to have more than 25 Apple stores in China

Apple CEO Tim Cook expects China to become the company's largest market, surpassing the U.S.

Optimistic about the potential of the market, the company now plans to exceed its original target of 25 official Apple stores in the country, Cook told local press in interviews on Thursday.

Cook is on his second visit to the country as Apple's CEO. On the same day he held talks with the nation's largest mobile carrier, China Mobile, which has yet to sell the iPhone.

China is currently the company's second largest market. Cook did not say when he expected it to overtake the U.S.

In the interviews, Cook said Apple would exceed it's plan of having 25 company stores in China, a goal which had been mentioned back in 2010. But it would take time to construct the stores because Apple wants the buildings to be large in order to serve more customers, he said.

So far, Apple has 11 company stores in mainland China and Hong Kong. Six of those stores opened last year.

Apple's products have been at times wildly popular in the country, generating long lines outside stores. iPad sales continue to dominate China's tablet space. But in smartphones, Apple has struggled to maintain a leading market share.

In last year's third quarter, Apple fell out of the country's rankings for top five smartphone vendors, with Samsung and Chinese handset makers leading the pack. Apple's newly launched iPhone 5, however, is expected to help the company regain market share, according to analysts.

The company has been in talks previously with China Mobile about selling the iPhone. The carrier has more than 700 million customers, and without China Mobile, Apple's growth in the country has been constrained, said Teck Zhung Wong, an analyst with research firm IDC. Apple could not be reached for comment.

IDC, however, projects China Mobile won't offer the iPhone until 2014, after the carrier is expected to launch its commercial 4G LTE network. China Mobile's current 3G network relies on a mobile standard not widely used outside the country known as TD-SCDMA (Time Division Synchronous Code Division Multiple Access). Apple would have to re-engineer its iPhone in order to use the network.

With China becoming a vital market for Apple, Cook also said he wanted the country to be among the first to receive the company's newest products. Historically, many of Apple's latest gadgets launch in China weeks or months after they've already been first sold in the U.S. Cook said this was because products have to undergo regulatory checks, which take longer in China.

He hoped the processing time for the checks will be shorter in future, and said the company has been working with Chinese authorities on resolving the issue for years now.

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Michael Kan

IDG News Service
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