or Connect
AppleInsider › Forums › Mobile › iPhone › Apple takes 7% share of Chinese smartphone market in Q4 on strong iPhone 5s sales
New Posts  All Forums:Forum Nav:

Apple takes 7% share of Chinese smartphone market in Q4 on strong iPhone 5s sales

post #1 of 24
Thread Starter 
During the last quarter of 2013, Apple upped its share of the Chinese smartphone market to 7 percent on positive iPhone 5s demand, but still trails in fifth place behind vendors with cheaper offerings.

iphone-5s-features-20130910.jpg


According to the latest statistics from market research firm IDC, Apple's smartphone marketshare in China grew one percent quarter-to-quarter in the last three months of 2013, making it the fifth-largest handset vendor in the country, reports The Wall Street Journal.

The numbers do not include iPhone sales from the world's largest cellular carrier China Mobile, however, which recently inked a deal with Apple after years of rumors and back room negotiations. Expected to boost the iPhone's presence in China, the partnership was officially announced in December.

In January, Apple CEO Tim Cook was in-country to hand out the first iPhones to China Mobile customers. The chief executive later said he was "incredibly optimistic" about the China Mobile deal, adding that the iPhone was the beginning to the companies' new partnership.

As for the other top-five players in China's smartphone market, Samsung once again captured the top spot, with its "whatever sticks" assortment of Android-based nabbing a 19 percent share for the fourth quarter. Lenovo came in second with 13 percent of the market, while Coolpad rounded out the top three with an 11 percent share. Ahead of Apple in fourth place was Huawei, which managed to wrangle 10 percent of China's smartphone business for the three-month period.

While the big-name manufacturers battled for double-digit slices of China's pie, dark horse Xiaomi nearly matched the iPhone's marketshare with a 6 percent take. The domestic electronics maker's huge gains come as somewhat of a surprise given the firm launched its first handset only three years ago.

China is an important region for Apple's future growth. During the company's quarterly earnings conference call for the first fiscal quarter of 2014, Apple CFO Peter Oppenheimer said China revenue came in at above $8.4 billion, up 29 percent from the year prior. The region accounted for the biggest positive year-over-year change for Apple during the three-month period ending in December.
post #2 of 24
So much for the theory that the 'c' in iPhone 5c is for "china" 1smile.gif

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
Reply

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
Reply
post #3 of 24
Q: What's Apple's "next big thing"?
A: China.

Sent from my iPhone Simulator

Reply

Sent from my iPhone Simulator

Reply
post #4 of 24
Groan. . . Why should Apple Insider, of all sites, report IDC lowball estimates,as fact?! Are the editors really so desperate for clicks? Why trust any of the dodgy figures purveyed by analytic houses, when no mythology is revealed, no clients disclosed, no margins of error provided, and in an environment where only Apple reports unit sales? IDC could just be making up these numbers and they could never be checked against reliable data. IMO best never to purvey such numbers at all.
post #5 of 24
So Apple was on an upward trend in China even before CM.

Can you please break out Apple's share of the high end smart phone market? That number will surely be far higher. Thanks.
post #6 of 24

Remember “we’d like 1% in the US”?

 

It’s just funny, is all.

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
Reply

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
Reply
post #7 of 24

I'm curious how much actual $$ was made.  Samsung may have sold the most (if not dumped) phones in China, but who made the most money?  I would think 7% of the Chinese smartphone market means Apple made the majority of revenue there.  Any numbers?

post #8 of 24
Quote:
Originally Posted by Tallest Skil View Post

Remember “we’d like 1% in the US”?

It’s just funny, is all.

Yeah... insouciant newcomer seeks 1% market share...
Quote:
At Macworld 2007, Steve Jobs stated “1% market share equals 10 million units. This is a giant market. If you have just 1% market share, you’re gonna sell 10 million phones, and this is exact what we’re going to try to do in 2008. Our first full year in the market. Is grab 1% market share and go from there.”

http://www.applegazette.com/iphone/apple-is-likely-to-hit-its-goal-of-1-market-share-in-2008/


and this...
Quote:
I thought those who haven't seen it might enjoy this interview Microsoft CEO Steve Ballmer gave in January 2007, right after Apple and Steve Jobs unveiled the device at Macworld. Asked for his "first reaction" after seeing the iPhone, Ballmer replies with haughty laughter:

"Five hundred dollars fully subsidized with a plan! I said that is the most expensive phone in the world and it doesn't appeal to business customers because it doesn't have a keyboard, which makes it not a very good email machine .... I like our strategy. I like it a lot....Right now we're selling millions and millions and millions of phones a year, Apple is selling zero phones a year. In six months, they'll have the most expensive phone by far ever in the marketplace and let's see ... let's see how the competition goes."

http://www.networkworld.com/community/blog/look-back-steve-ballmer-laughs-iphone
"...The calm is on the water and part of us would linger by the shore, For ships are safe in harbor, but that's not what ships are for."
- Michael Lille -
Reply
"...The calm is on the water and part of us would linger by the shore, For ships are safe in harbor, but that's not what ships are for."
- Michael Lille -
Reply
post #9 of 24

The drive for market share doesn't work in a third world economy where only the tiniest percentage of people can afford to buy what you're selling.   And to address the masses and claim market share, you'd have to sell a phone for next to nothing and make no profit on it.   Now that can be a valid strategy for some companies on the basis that you want to build customer loyalty so that eventually, when the masses can afford more, they'll stick with you.    The only problem with that would be is that there's very little loyalty when it comes to technology.    

 

So sure, the idiot analysts who only know the buzzwords and only one way of thinking about the parameters of supposed success will constantly downplay Apple as it doesn't make a cheap phone for the masses and Apple will never make a huge market share in China.   But they'll make a hell of a lot of money.  

 

But let's not forget that average income in China is only about $2100 annually (in 2012).    The best pay is in the big cities.  In Shanghai, average pay is about $4700 a year.   Those in the top 5% income bracket earned 23% of China's total household income (which sounds terrible until you realize that the income disparity in the U.S. is far greater where the top 1% earned 22.5% of all income (in 2012, probably slightly more in 2013), but the summary of the report I referenced did not indicate how many people in China that comprised.   Obviously, that upper 5% is going to be the market for an iPhone and obtaining 20% of that would result in an overall 1% market share. 

 

1% of China's population between 15 and 64 is almost 10 million people.   At $300 per phone, that's almost $3 billion in revenue for every 1% of market share they can attain.    So you don't need a big share to bring in a ton of money.

post #10 of 24
Quote:
 I thought those who haven't seen it might enjoy this interview Microsoft CEO Steve Ballmer gave in January 2007, right after Apple and Steve Jobs unveiled the device at Macworld. Asked for his "first reaction" after seeing the iPhone, Ballmer replies with haughty laughter:

"Five hundred dollars fully subsidized with a plan! I said that is the most expensive phone in the world and it doesn't appeal to business customers because it doesn't have a keyboard, which makes it not a very good email machine .... I like our strategy. I like it a lot....Right now we're selling millions and millions and millions of phones a year, Apple is selling zero phones a year. In six months, they'll have the most expensive phone by far ever in the marketplace and let's see ... let's see how the competition goes."

 

While Microsoft was obviously not very successful in the phone market, the fact remains that the iPhone did not really become massively successful in the market until Apple worked out the deal with AT&T to subsidize the phone and bring the perceived price down to $200.    If Apple had not accomplished that, the iPhone would still be a phone only used by the elite and people whose company would pay for the phone.  

post #11 of 24
Quote:
Originally Posted by zoetmb View Post

the fact remains that the iPhone did not really become massively successful in the market until Apple worked out the deal with AT&T to subsidize the phone and bring the perceived price down to $200.

Well that explains the US iPhone market... what about the rest of the world?

You know Apple sells most of their iPhone outside of the US... right?

And most countries don't have subsidies...
post #12 of 24
Quote:
Originally Posted by zoetmb View Post

The drive for market share doesn't work in a third world economy where only the tiniest percentage of people can afford to buy what you're selling.   And to address the masses and claim market share, you'd have to sell a phone for next to nothing and make no profit on it.   Now that can be a valid strategy for some companies on the basis that you want to build customer loyalty so that eventually, when the masses can afford more, they'll stick with you.    The only problem with that would be is that there's very little loyalty when it comes to technology.    

So sure, the idiot analysts who only know the buzzwords and only one way of thinking about the parameters of supposed success will constantly downplay Apple as it doesn't make a cheap phone for the masses and Apple will never make a huge market share in China.   But they'll make a hell of a lot of money.  

But let's not forget that average income in China is only about $2100 annually (in 2012).    The best pay is in the big cities.  In Shanghai, average pay is about $4700 a year.   Those in the top 5% income bracket earned 23% of China's total household income (which sounds terrible until you realize that the income disparity in the U.S. is far greater where the top 1% earned 22.5% of all income (in 2012, probably slightly more in 2013), but the summary of the report I referenced did not indicate how many people in China that comprised.   Obviously, that upper 5% is going to be the market for an iPhone and obtaining 20% of that would result in an overall 1% market share. 

1% of China's population between 15 and 64 is almost 10 million people.   At $300 per phone, that's almost $3 billion in revenue for every 1% of market share they can attain.    So you don't need a big share to bring in a ton of money.

Quoted for truth. A very insightful post, that I very much enjoyed reading. 1smile.gif

One thing though: How do you arrive at $300 per phone; isn't the iPhone ASP well north of $600?

I hope you're holding some AAPL!
post #13 of 24

One thing the analysts can't measure is the number of iPhones that were and still are being purchased by Chinese travelers for themselves, relatives, and friends back in China.I think that could add up to an impressive number.

"You can't fall off the floor"   From 128k Mac to 8GB MBP

Reply

"You can't fall off the floor"   From 128k Mac to 8GB MBP

Reply
post #14 of 24
One thing though: How do you arrive at $300 per phone; isn't the iPhone ASP well north of $600?

That's $300 profit per phone!
post #15 of 24
The term 'smart phone' is used far to readily. How can you compare an iPhone and its ecosystem to some of the rubbish low cost phones. It's time there were new criteria and nomenclature established to differentiate or to loosely paraphrase a well known film, 'smart' from 'smarter'.
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, SE30, IIFx, Towers; G4 & G3.
Reply
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, SE30, IIFx, Towers; G4 & G3.
Reply
post #16 of 24
Quote:
Originally Posted by sflocal View Post
 

I'm curious how much actual $$ was made.  Samsung may have sold the most (if not dumped) phones in China, but who made the most money?  I would think 7% of the Chinese smartphone market means Apple made the majority of revenue there.  Any numbers?

SameDung may have shipped a lot of phones to China, but they have not sold many at all.  They just pile up gathering dust.

post #17 of 24
Quote:
Originally Posted by kroginold View Post

One thing though: How do you arrive at $300 per phone; isn't the iPhone ASP well north of $600?

That's $300 profit per phone!

The OP said revenue, and I don't think that he would have simply confused the terms.
And it's more like $400 of gross profit per iPhone.
post #18 of 24
Quote:
Originally Posted by Tallest Skil View Post
 

Remember “we’d like 1% in the US”?

 

No, it was 1% of the total mobile phone market worldwide that Steve said they were aiming for in 2008.  10m units out of 1bn total.

 

 

 

Still pretty amazing how far they've come.

censored

Reply

censored

Reply
post #19 of 24
Quote:
Originally Posted by Suddenly Newton View Post

So much for the theory that the 'c' in iPhone 5c is for "china" 1smile.gif

Wait about a year before you Ballmerize like this. The 5c has just started with China Mobile, and its LTE capabilities are a key factor.
post #20 of 24
Quote:
Originally Posted by kroginold View Post

One thing though: How do you arrive at $300 per phone; isn't the iPhone ASP well north of $600?

That's $300 profit per phone!

 

 

Quote:
Originally Posted by december View Post


The OP said revenue, and I don't think that he would have simply confused the terms.
And it's more like $400 of gross profit per iPhone.

 

I didn't know how much Apple is charging for the iPhone in China and/or what kind of discount they might be giving to the Chinese phone companies, so I "guessed" at $300 and figured that people here were smart enough to multiply my calculation of revenue by whatever factor necessary based on what Apple is really charging.   If it is $600, then (obviously) one can double the revenue calculation. 

post #21 of 24
Quote:
Originally Posted by SudoNym View Post
 

SameDung may have shipped a lot of phones to China, but they have not sold many at all.  They just pile up gathering dust.


Must be gold dust they are gathering then, judging by their earnings.

 

Yet another 'park my intellect at the door, stick a tube up my nostril, suck out half my brain, replace it with koolaid then enter the sanctum to wave my pompoms and repeat trite falshoods.'

post #22 of 24
No growth and doooomed!

The big picture is the middle class in China is growing and will be larger than the entire US pop in a few years. Skating to where the puck will be, Apple is.
post #23 of 24
Quote:
Originally Posted by SockRolid View Post

Q: What's Apple's "next big thing"?
A: China.

 

This is true, but it's a good thing.  It means more money for Apple, which means more money in R&D, which means better stuff for us all in years to come.

post #24 of 24
Quote:
Originally Posted by SockRolid View Post

Q: What's Apple's "next big thing"?
A: China.

 

More profits to drive the stock down?? HAHA

New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: iPhone
  • Apple takes 7% share of Chinese smartphone market in Q4 on strong iPhone 5s sales
AppleInsider › Forums › Mobile › iPhone › Apple takes 7% share of Chinese smartphone market in Q4 on strong iPhone 5s sales