By: Gigaom
Apple’s China challenge: Cheap Androids own 90.1% of market
China may be Apple's next frontier for smartphone growth, but the company has some catching up to do. Android handsets that cost one-third of the iPhone have taken the market by storm: Android now accounts for 90.1 percent of the smartphone market in China.

Apple has repeatedly noted that China is an area of focus for the company, and why not? It’s the most populous nation on the planet with more than a billion mobile phone subscribers. Based on recent data reported by Chinese research firm, Analysis International, which has tracked smartphone sales for the past several quarters, Apple may have a challenging time replicating the market share success its iPhone has seen in other countries: In the third quarter of 2012, Android accounted for 90.1 percent of all smartphone sales in China.

Wired’s editor-in-chief, Chris Anderson tweeted out the data, which we found through Thomas Morffew on Google+ and the chart is stunning when you see Android’s rise since the second quarter of 2011. It’s also notable how fast Nokia’s Symbian platform declined over the same period.

I can understand the Symbian decline, but was surprised to see Android’s continual ascent into dominance. Then I saw what’s the mostly likely reason: Device cost.

Analysis International also tracked the average selling price of handsets by platform and that helps explain the situation. While costs for all smartphones have been decreasing in China, the average Android handset costs about one-third that of an iPhone. In the most recent quarter, for example, an Android handset costs 1393 Yuan (US $223.36) on average. The average price for an iPhone is 4523 Yuan (US $725.25), or roughly three times the cost.

I wouldn’t expect most of the Android devices in the Chinese market to be flagship smartphones or high-end devices, but that may not matter as Chinese consumers migrate to their first smartphone. A low- to mid-end Android model is surely more capable than the phone its replacing. And perhaps this situation shouldn’t have surprised me after all. Just two years ago, I noted that Android was poised to power the next 500 million web users in India, the second most populous nation.

I suspect Apple will still sell more than enough iPhones in China to add billions of profit for the company. But any ideas of iOS taking a large portion of the market in China — or India, for that matter — have to be tempered due to the fast growth of Android.



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