‘Apple share of China smartphone falls’

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Apple Inc's share of China's smartphone market almost halved to 10 percent in April-June as buyers waited for the next iPhone model - expected later this year - or switched brands, data from industry research firm IDC showed on Friday.

China, Apple's second-largest market, is set to overtake the United States as the world's biggest smartphone market this year, with demand driven by generous handset subsidies offered by the three main carriers, increasingly tech-savvy consumers and more feature-packed and affordable products.

For the first time, smartphone shipments in China overtook feature phones in the second quarter, with local brands Lenovo Group Ltd and ZTE Corp pushing Apple to fourth place from second, the IDC data showed.

Total April-June smartphone shipments rose to 44 million, accounting for 51 percent of China's total mobile shipments of 87 million, IDC said.

“There are two things in play,” said IDC analyst TZ Wong, referring to Apple's drop in ranking and market share. “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.”

South Korea's Samsung Electronics Co Ltd retained its lead in the Chinese smartphone market with a share of 19 percent, though this was down from 21 percent in the previous quarter, according to the IDC data.

Lenovo, the world's No.2 vendor of personal computers which makes the LePhone, climbed to second place and increased its China market share to 11 percent from a single-digit percentage in the first quarter when it was ranked 7th, the data showed. Local rival Huawei Technologies Co Ltd ranked fifth.

Data from Gartner, another research firm, showed Apple's market share fell to 12 percent in the second quarter from 17 percent in the previous three months, though it kept its No.2 ranking, according to a report by Nomura Securities.

CHIPS FOR CHINA

US chipmakers such as Qualcomm Inc have been trying to capture a larger slice of a booming market that has long been dominated by Taiwan's Mediatek Inc and China's Spreadtrum Communications Inc, by offering chipsets and solutions catered to Chinese vendors.

Recently launched Chinese smartphones packed with Qualcomm's Snapdragon chips include Huawei's G330D and Xiaomi Technology's MI2.

“It's such an important market because of the volume and the growth rate, which are so attractive for chipset vendors ... so we're seeing a lot of competition,” said James Shen, Qualcomm's vice president for business development.

In the overall mobile phone market in China, which includes smartphones and feature phones, Samsung, Nokia and ZTE top the rankings for the second quarter, IDC said.

IDC's Wong said it was inevitable that Chinese brands would gradually gain more share due to their aggressive marketing and close ties with local carriers China Mobile, China Unicom and China Telecom.

“In the mid- to long-term, it's very possible they will start to dominate four of the top five (rankings), leaving Samsung as the only one standing. At that point, even Samsung will start to feel the pressure.” - Reuters


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