China Smartphone Growth Faster Than Expected, Apple Slows

Expected growth happening far faster than was estimated for China.

It looks like smartphone growth in China has skyrocketed this year in China and they will soon be taking over the number 1 spot in the world. They will surpass the US in smartphone sales and ownership this year which is far faster than previously estimated to happen. In a recent report from IDC, they are talking about the rapid growth of smartphones in China and the decline of "feature" phones there as well. And in a surprising note, Apple has lost ground in China for market share which should be considered a significant change for them.

Much of this is being reported by Reuters where Apple went from a 20% market share down to a 10% market share. That is too much for Apple to ignore given the sales potential which exists in China. It appears that the higher priced Apple devices, while coveted, are just too expensive for people with all the other phones available. And those other phones come at cheaper prices and a large number of features which people want to see. Even the iPhone 5 has been copied and is on sale from Goophone with a picture above from their web site. Since the iPhone 5 is not even on sale yet, this is a problem for Apple. The Goophone is running Android and is undoubtedly far cheaper than the coming iPhone 5. This will erode their market share even more.

Apple's market share dropped to 10% from the previous 20% in the current April through June period. Apple is now in 4th place in overall market share. Leveno and ZTE top the list behind Samsung and are local companies in China. Samsung was ranked 1st in the IDC report and their market share dipped from 21 percent to 19 percent. Apple came in 4th in the recent report. Some can attribute Apple's drop due to the anticipation of the coming iPhone 5, but with the Goophone being out, that may not be the case and Apple could slip again in coming reports.

The smartphone growth in China is happening a year sooner than was expected as lower priced smart phones have entered into the market there. Given the report predictions, the US will lose it's position as the number 1 country for smartphone ownership. This is predicted to happen no later than December of this year where China will have 26.5% of the market sales, US with 17% and the UK in 3rd with 4.5%. This is not to say that the US is slowing down in smartphone sales, but that lower priced smart phones are being purchased in China to replace feature phones there. But, the US will remain behind China from that point on due to the population size differences.

With the lower priced Goophone coming out as a copy of the iPhone 5, Apple stands to lose some sales as a result. But for China, their standing in the market place for smartphones is heading upwards and soon there will be no challengers to their standing for smartphone market share.