iPhone 5 fails to boost Apple's market share in China

o Michael Kan

Despite the launch of the iPhone 5 in December in China, Apple's smartphone market share in the nation barely grew during last year's fourth quarter, according to research firm Canalys.

The company remained the sixth largest smartphone vendor, a position it held in the third quarter. Its market share increased to 8.5 percent in China in the fourth quarter, up 0.5 percent from the previous quarter, said Canalys analyst Nicole Peng on Friday.

In contrast, competitor Samsung took the top spot, with a 16 percent market share, followed by Chinese vendors, Lenovo, Yulong Computer Telecommunication Scientific, Huawei and ZTE.

Although Apple's iPhone 5 has been selling well, its impact on the company's market share has been blunted by the booming growth in China's smartphone segment as a whole, Peng said. During the quarter, smartphone shipments reached 65 million units, with the growth driven by low-end handsets, some of which are priced at 500 yuan (US$79).

"The iPhone 5 is doing very well, and you saw for the first time Apple announced it had sold 2 million iPhones in the first weekend of sales in China," Peng said. Quarter-over-quarter, Apple's iPhone shipments to the nation were up 30 percent, she added.

But the company's penetration in the Chinese market is still limited by the absence of a low-priced smartphone in its portfolio of products. Apple has also yet to strike a deal with the country's largest carrier China Mobile to sell its iPhone.

"Apple can only do so much," Peng said. "Lenovo, Huawei, ZTE, their market shares have been supported by low-end models."

China's smartphone market is so large that Lenovo became the world's top five vendor in the fourth quarter on the back of sales in the country. 98 percent of Lenovo's smartphone shipments of 9.5 million phones went to China, according to Canalys.

The Chinese market has been dominated by domestic smartphone vendors. About 70 percent of all sales come from local brands, according to Peng. Foreign vendors such as Nokia, BlackBerry, HTC and Sony, however, have struggled to release devices with a mass-market appeal.

"This market is still wide open, but it's very, very competitive," she added. "It's not just about low-end handsets, but making a product that is successful for the market."

Source: news.idg.no