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China's smartphone market grows 164%, Apple's iOS takes 17.3% share

post #1 of 10
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Even without availability on China's largest mobile provider, the iPhone's market share in China has grown form 9.9 percent a year ago to 17.3 percent in the June quarter.

Needham & Company analyst Charlie Wolf's quarterly report on the smartphone industry was issued on Monday, and identified the "big news" of the quarter as the emergence of China as the leading smartphone market. Smartphone shipments in China grew 164 percent year over year to 33.1 million units in the June quarter, topping the 25 million units sold in the U.S.

Among mobile operating systems, Apple's iOS took a 17.3 percent share according to data from Gartner. Much of its growth from 9.9 percent a year ago stems from the launch of the iPhone on China Telecom this year.

But while Apple has deals in place with both China Telecom and China Unicom, the company has yet to forge a partnership with China Mobile, the largest wireless provider in the world with more than 650 million subscribers. Reports have suggested that Apple's next iPhone will add compatibility with China Mobile's proprietary wireless network.

Apple's 17.3 percent share in China was well behind Google's Android platform, which dominated with 69.5 percent of smartphones sold in the country. Apple took second place, while Nokia finished in third with an 11.2 percent share.

Needham


"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," Wolf wrote. "A material percentage of these sales were captured by second-tier Chinese manufacturers."

In his latest note, Wolf also tackled the issue of iPhone carrier subsidies, through which carriers pay for a majority of the cost of an iPhone sale by locking customers in to a two-year service contract. Some carriers have expressed interest in reducing their iPhone subsidies and passing more of the cost of an iPhone sale on to the customer.

Wolf said that while the argument for reducing subsidies for the iPhone may be "seductive," he also believes it's "irrelevant." He believes that the carriers earn more on iPhone sales than they do on sales of competing smartphones with smaller subsidies.

"iPhone owners are more active users of the carriers' networks and generate the highest ARPU rates," he wrote. "Second and more importantly, 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."
post #2 of 10
I wonder how much Google will make out of their bastardized rip off of iOS flooding the Chinese market ... not too much I'd suspect.
Enjoying the new Mac Pro ... it's smokin'
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini.
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Enjoying the new Mac Pro ... it's smokin'
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini.
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post #3 of 10
March quarter or June quarter? If it is just March data as the graphs suggest, this is pretty much old news. It will be much more interesting to see what China smart phone sales do post lunar new year-- if they can continue to out-pace US sales.
post #4 of 10

a lot


Edited by patpatpat - 7/9/12 at 8:58am
post #5 of 10

Well done Nokia for hanging in there.

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post #6 of 10
Apple is earning 4x of what Google is doing . I wonder how much of the google market share increase is needed to catch up Apple profit .
post #7 of 10
Quote:
Originally Posted by raymondinperth View Post

Apple is earning 4x of what Google is doing . I wonder how much of the google market share increase is needed to catch up Apple profit .

Android market share is 4x apples, Apples revenue is 4x Googles, so sounds like they should be making the same amount of money. Except Google doesn't make any hardware, has no physical stores and does not have to deal with warranties/returns, in fact Google doesn't really ship anything.  Also don't forget Google make a lot of money from iPhone sales too. Latest reports I saw state Google makes 4x more revenue off iPhone than Android platform, so either way, Google is doing pretty well.


Edited by patpatpat - 7/9/12 at 9:31am
post #8 of 10
Quote:
Originally Posted by raymondinperth View Post

Apple is earning 4x of what Google is doing . I wonder how much of the google market share increase is needed to catch up Apple profit .

As it stands now it can't happen IMHO. That doesn't mean Google isn't successful, nor that it hasn't made a lot of people wealthy...

tho perhaps not this wealthy.

http://news.cnet.com/8301-1023_3-57380661-93/googles-schmidt-to-sell-$1.5-billion-in-stock/

melior diabolus quem scies
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melior diabolus quem scies
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post #9 of 10
Quote:
Originally Posted by patpatpat View Post

Android market share is 4x apples, Apples revenue is 4x Googles, so sounds like they should be making the same amount of money. Except Google doesn't make any hardware, has no physical stores and does not have to deal with warranties/returns, in fact Google doesn't really ship anything.  Also don't forget Google make a lot of money from iPhone sales too. Latest reports I saw state Google makes 4x more revenue off iPhone than Android platform, so either way, Google is doing pretty well.

First point: no that means that The Android ecosystem is making 1/16 the amount of money.

 

2nd Point:

 

Google makes 2Billion from iOS in 2011 in mobile revenue (not profit) and $500Million from Android.

That pretty much tells me that 4:1 ratio still holds true.  But that is revenue...  Google's Margins: 25% (apple's are 30)... So they might be making a profit of 600Million/100Million iOS devices: $6 per iDevice... per year.

 

Apple makes about  $240 per sale of an iPhone... That's about $10/month per iPhone (not counting their ecosystem, including iAds )

Let's say Apples makes $2 a month selling apps, movies, books, music, applecare, smart covers, and iAd...  12/month 

 

$6 a year  Google makes per iDevice:  Apple: $12 a month

$6/yr << $144 a year

Appl makes $138 profit per device per year.

Money in the bank.

 

You definition of  'doing pretty well'  is compared to what?  their partners (LG, HTC)?  

 

 

Yeah, that Android Ecosystem... heck of a economic force.

post #10 of 10
Quote:
Originally Posted by TheOtherGeoff View Post

First point: no that means that The Android ecosystem is making 1/16 the amount of money.

 

2nd Point:

 

Google makes 2Billion from iOS in 2011 in mobile revenue (not profit) and $500Million from Android.

That pretty much tells me that 4:1 ratio still holds true.  But that is revenue...  Google's Margins: 25% (apple's are 30)... So they might be making a profit of 600Million/100Million iOS devices: $6 per iDevice... per year.

 

Apple makes about  $240 per sale of an iPhone... That's about $10/month per iPhone (not counting their ecosystem, including iAds )

Let's say Apples makes $2 a month selling apps, movies, books, music, applecare, smart covers, and iAd...  12/month 

 

$6 a year  Google makes per iDevice:  Apple: $12 a month

$6/yr << $144 a year

Appl makes $138 profit per device per year.

Money in the bank.

 

You definition of  'doing pretty well'  is compared to what?  their partners (LG, HTC)?  

 

 

Yeah, that Android Ecosystem... heck of a economic force.

 

Tell that to the investors. I don't see any one complaining. Googles almost 10B profit for 2011 vs Apples 25B is pretty good for a company that didn't manufacture or ship a single piece of hardware. You can't expect Google to have the same profit margin per smartphone as apple when it doesn't even manufacture the hardware. They're 2 completely different business models and to say Google is not doing well is just nuts.

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