Chinese Produce iPhones, But Aren't as Interested in Buying Them
August 24, 2012 1:24 PM
comment(s) - last by
Apple market share in the world's biggest smartphone marketis halved in Q2
While Apple, Inc. (
) is based in Cupertino, Calif., China is the company's home away from home; the place where
all of its i-gadgets are assembled
. But in the birthplace of sparkling new iPhones, the world's most populous nation and largest smartphone market, Apple is struggling.
I. Apple Falls to Fourth
In Q2 Apple fell to fourth place in this massive market, with the IDC Group reporting market share plunging from 20 percent to 10 percent. Gartner, Inc. (
a smaller drop from 17 to 12 percent. Regardless of which numbers are correct, the consensus is Apple struggled in China; at least for a quarter.
Samsung Electronics Comp., Ltd. (
), Apple's bitter perennial rival also fell slightly from 21 percent to 19 percent, but clung to the top sales spot. Meanwhile, a local firm, Lenovo Group, Ltd. (
) -- makers of the Intel Corp. (
-- rose to second, seizing 11 percent of the market. Lenovo is currently in second place in PC sales as well, globally. ZTE Corp. (
) also did well, moving past Apple and into third place.
So why are the Chinese turning there back on the iPhone, long considered
a coveted status symbol
among Chinese youth? IDC analyst TZ Wong suggests, "There are two things in play. 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."
The iPhone 4S has not been selling great in China from April to June.
[Image Source: Reuters/Jason Lee]
II. The Chinese Hardware Market Gets Competitive
One thing that has begin to impact Apple's sales is a faster pace of hardware turnover on the Chinese market. Traditionally, China received hardware that was dated by U.S. standards. Today it's getting bleeding edge hardware that American buyers don't have access to.
For example Lenovo -- or any manufacturer for that matter -- has yet to release an Android smartphone in the U.S. powered by Intel's chips. And on the ARM Holdings plc. (
) side of the fence, Qualcomm, Inc. (
) is shipping
Snapdragon 4 chips
to Chinese Android smartphone makers.
Huawei's G330D and Xiaomi Technology's MI2 both have Snapdragon 4 chips, just like the HTC Corp. (
) EVO 4G LTE and
Samsung's Galaxy S III LTE
sold in the U.S.
Domestic phonemakers have stepped up their game with handsets like the Snapdragon 4-powered MI2 from Xiaomi Technology. [Image Source: Xiaomi]
In short, Chinese buyers are turning away from iPhone and towards domestic brands not solely out of a sense of national pride, but largely because the domestic players are putting out handsets with hardware that surpasses that found in the current generation iPhone.
Apple is far from out of the Chinese market, with its next generation smartphone incoming
in only a few weeks
, but it has its work cut out for it in these competitive times.
This article is over a month old, voting and posting comments is disabled
8/24/2012 2:52:06 PM
The key word here is "COMPETITIVE". Its a foreign word in the North America market. The only way to keep or gain market share is to SUE, in N America. Monopolize and Sue are the word most Corporations in N America understand. Now those words arn't foreign to apple. If apple wasn't an American Company, I don't think it could get away with the crap their foisting on to the Consumers, I'm not talking product, I'm talking attitude, and mentality. What was that news item about apple being involved with 60% of all patent lawsuits. One of the reasons the iphone looks so good in N America is that the better and innovative phones are kept out of the N American market. apple can only pretend, using the boys club media, to be the best in town.
Examples HDTV kept out of N America approximately 10 yrs so USA could control the DRM standards and license to foreign companies instead of the other way around. Cell phone technology standards one generation ahead in Europe and Asia before USA adopts. USA has shown that to compete, one must buyout or Sue them out of business. Mean while the N American companies play their silly little games in court, the consumer loses big time. The USA talks the talk when it preaches FreeTrade, but doesn't walk the walk when true competition comes. Then the import barriers and the court system all come into play. The consumer knows, look at the crap with Regional DVD's, one region pays more or less then another. They wonder why theirs piracy. When USA companies sell software, movies,etc, cheaper in china then in their own country. No wonder consumers are pissed off in USA when they hear and read that. Their paying a higher price to subsidize the people in other nations such as China because they can't compete. Just my perspective at whats happening.
8/24/2012 3:00:32 PM
Don't lump Canadians in with the US with N America. Hate to admit it being a US citizen, but those guys in the great white north have some good things over us when it comes to business laws and patent system.
8/24/2012 9:48:14 PM
The worst part about Canada is a total lack of competition in certain industry sectors, and surprisingly it's a lot worse than USA at times. Look at the wireless telcos for just one example, another being home internet services.
You think being locked to two-year smartphone plan contracts is bad? Try three years.
Also, the Canadian version of RIAA is just as dumb as the real thing south of the 49th Parallel.
"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA
LG's New Dual-Function Display Tech Hit Mass Production, Headed for iPhone
August 23, 2012, 12:31 PM
China Labor Watch Releases Poor Report on Apple Supplier's Working Conditions in China
June 29, 2012, 2:05 AM
Samsung Galaxy S III To Hit all Four Major U.S. Carriers Starting at $199 on June 21
June 4, 2012, 9:48 AM
Intel Announces Earnings, Its First Smartphone Launches This Week
April 18, 2012, 11:33 AM
Qualcomm Announces Snapdragon 4 "Pro" CPU, Pumps Up Onboard GPU
February 27, 2012, 9:38 AM
Man Who Shot Father for Texting During Movie Previews Was Also Texting
March 14, 2014, 2:25 PM
Sony's PS4 Outsells Microsoft's Xbox One for February
March 14, 2014, 12:36 PM
Skrillex Releases Free Album Inside App, But Crashes Torture Fans
March 13, 2014, 8:04 PM
Microsoft Waives Windows Phone OS Licensing Fees for Two Hardware Makers in India
March 13, 2014, 1:07 PM
Huawei Says Windows Phone is "Low Priority", Relegates It to Dual OS
March 13, 2014, 11:21 AM
$1,200 Nikon 1 V3 Mirrorless Camera Offers 120fps Slow Motion Capture
March 13, 2014, 9:04 AM
Most Popular Articles
Bitcoin King Pt. II: Mt. Gox's Dictator Karpelès Proves Tragically Flawed
March 7, 2014, 1:12 PM
Hack Reveals Fallen Bitcoin CEO's Posh Tokyo Penthouse
March 10, 2014, 4:28 PM
Tesla Motors Calls New Jersey Out on New Rule Against Its Direct Sales Model
March 11, 2014, 12:01 PM
NASA Considering SpaceX "Red Dragon" for Returning Mars Samples to Earth
March 10, 2014, 2:43 PM
India Could Rock Google With Its Biggest Antitrust Fine Yet -- $5B USD
March 10, 2014, 8:12 PM
Latest Blog Posts
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
Global Cyber Espionage Concerns Reveal Growing Cyber Armies
Nov 29, 2013, 11:04 AM
Is The Period Becoming an Expression of Anger?
Nov 26, 2013, 2:02 PM
NSA and Congress -- You Will Never Kill the Constitution, It's an Idea
Nov 10, 2013, 2:00 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information