Needham & Company analyst Charlie Wolf released his quarterly report on the status of the smartphone market, pointing out that China is the worldwide leader. Shipments in China increased 164 percent from the year-ago quarter, now at 33.1 million units. The United States is second in the race with 25 million units sold in the most recent quarter.
Wolf speculates that the reason for such rapid growth in China is the low prices of smartphones there. “The surge in China can be traced in part to the introduction of smartphones at materially lower prices that made them competitive with feature phones,” he writes in his report. “A material percentage of these sales were captured by second-tier Chinese manufacturers.”
Many analysts assumed that because the low-end market is seeing such success in China, the Apple iPhone wouldn’t stand a chance, but it appears that’s not quite the case. The iPhone’s market share in China jumped to 17.3 percent last quarter from the 9.9 percent it claimed a year before. It was able to gain traction by launching with China Telekom this year, but the iPhone still isn’t available on China’s largest carrier, China Mobile.
“The iPhone is an iconic brand that virtually sells itself, translating into a subscriber acquisition cost that is far lower than the SAC on competing smartphones,” wrote Wolf.
The iPhone is still far behind Android though. Android dominates in China with 69.5 percent market share. iOS is in a very distant second place and behind that is Nokia with 11.2 percent. Windows Phone is expected to slowly take over some of the Chinese market over the next few years as well.
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