Apple's iPhone takes 80 percent of China's booming premium phone market

Posted:
in iPhone edited November 2015
Countering the idea that China's smartphone market is only interested in cheap phones, Umeng, the nation's largest analytics firm, has issued a report for 2013 outlining that 27 percent of China's smartphones cost over $500, and that 80 percent of those are iPhones.

Umeng China


Highlighted by analyst Benedict Evans, Umeng's report (embedded below) details that China's market for smartphones and tablets exploded in 2013, nearly doubling from 380 million devices at the beginning of the year to more than 700 million by year end.

Apple currently markets three iPhone models on its Chinese website: iPhone 5s priced between $860 and $1120; iPhone 5c priced between $730 and $860; iPhone 4S priced at $535. The company originally continued to sell iPhone 4 in China priced at $435, but no longer lists that model for sale on its public website.

The fact that Apple has dominated China's most valuable segment of the smartphone market is particularly noteworthy because throughout 2013, it didn't have any agreement in place to sell iPhones on China Mobile, the nation's (and the world's) largest mobile carrier by far.

Apple inked a deal with China Mobile in January, making iPhone 5s and iPhone 5c two of the very few models capable of working on the carrier's newly deployed 4G network using a China-specific version of LTE technology.

Apple's chief executive Tim Cook told shareholders last month that both the iPhone 5s and iPhone 5c had outsold the models they replaced.

Apple building an iOS ecosystem stronghold in China

Evans separately noted that Apple now has "probably more" iPhone users in China than it has in the U.S., with around 100 million iPhone users in each country.

Last September, Cook noted Umeng research stating that the total number of Chinese iOS developers has increased 9.3 times between 2011 to 2013. Globally, Apple has over 6 million registered developers, with 1.5 million added in just the last year Cook said.

Evans rhetorically asked, "Has any foreign tech company done as well in China as Apple?"

Has any foreign tech company done as well in China as Apple?

-- Benedict Evans (@BenedictEvans)


Samsung, in contrast, has only captured 24 percent of China's Android market. In the U.S., Samsung maintains 26 percent of the entire smartphone market, behind Apple's 45 percent share, meaning Samsung's models make up nearly half of the U.S. Android market.

All smartphone users are not the same

Umeng detailed a series of trends related to apps, including a breakdown of what types of apps are used by different price tiers of smartphones.

"Users of phones priced below $150 tend to spend more time playing games and their favorite app categories is theme and wallpaper," the firm noted. "They are often sensitive to the price, have low requirements for the performance of phones, tend to be affected by pre-installed apps, and are less likely to use e-commerce, finance, health and lifestyle apps."

In contrast, Umeng stated that "users of high-end deices have more diverse needs and favor apps for news, navigation, finance, and ecomerce.. They might thane certain economic power, but more importantly, they rely on mobile Internet and their life patters will be shown on mobile devices, such as their demands for getting information, learning, shopping and finance management."

Umeng China apps


Umeng's data outlines that devices selling for less than $149 make up just 35 percent of China's smartphone market. Phones priced between $150 and $329 account for another 22 percentage points, while devices at $330 to $499 make up 16 percent of sales, leaving 27 percent priced above $500.

"The market for budget Android phones is strong in China, with 57 percent of devices under the $330 price range," Umeng stated. "However, over a quarter are using high end smartphones costing over $500; 80 percent of these are iPhones."

The firm also notes that the market for users new to smartphones is shrinking, and that a much larger percentage of smartphones are now upgrades for existing users, a trend that would appear to benefit higher end devices rather than cheap, entry level offerings.

Umeng's data highlights the fallacy of overall market share figures that throw valuable market segments together with low value volume sales. Data publicly published by IDC, for example, stated that Apple had "only" 7 percent of China's entire smartphone market, a figure that misled a variety of journalists into thinking that Apple's percentage points of market share were equal in value to the percentage points taken up by vendors of cheap devices that do not make any money.

Far fewer iPhone users jailbreak

Another trend Umeng highlighted is the rapid decrease in users jailbreaking their iPhones. While more than half of all iPhone 3GS models were jailbroken (in large part to enable them to work on local networks prior to their to receiving official support from carriers), only a tiny fraction of recent models are.

Umeng China jailbreak 2013


Overall, "the number of jailbroken iOS devices continues to fall (from 30% at the beginning of the year, to 13% at the end of the year," Umeng reported. "China has now become one the first launch areas for iOs devices. Users can easily and quickly get the new devices through official channels instead of purchasing jailbroken devices through the black market."

The analytics firm noted that users are also "becoming aware of the security risks of using a jailbroken phone."

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Comments

  • Reply 1 of 57
    red oakred oak Posts: 634member
    Apple is doomed. Especially in China
  • Reply 2 of 57
    512ke512ke Posts: 781member
    Wait a minute!

    27% of cell phones in China are high end

    And 80% of those are iPhones

    Therefore, 21.6% of cell phones in China are iPhones?

    And that was BEFORE the Apple/China Mobile deal?

    Huh? Am I making a dumb math mistake, or is that like the biggest news for Apple ever?
  • Reply 3 of 57
    sudonymsudonym Posts: 233member

    Only a fool would believe these analysts.  Wait for Apple to speak if you want the real truth.

  • Reply 4 of 57
    adrayvenadrayven Posts: 460member
    HA...

    HA HA.

    Ha Ha ha HA!


    HAHAHAHAHAHAHAHAHA HA!
  • Reply 5 of 57
    aaronjaaronj Posts: 1,595member
    Quote:

    Originally Posted by 512ke View Post



    Wait a minute!



    27% of cell phones in China are high end



    And 80% of those are iPhones



    Therefore, 21.6% of cell phones in China are iPhones?



    And that was BEFORE the Apple/China Mobile deal?



    Huh? Am I making a dumb math mistake, or is that like the biggest news for Apple ever?

     

    Nope, you're right: It's pretty huge news.

     

    And pretty much anyone should have seen this coming a mile away.  China has a middle class that grows by leaps and bounds every day.  Sure, there are a lot of poor people China -- because there are a lot of PEOPLE in China.  But there are also a lot of people who have the money to spend on premium items.  

     

    I mean, the women's tennis tour (WTA) has something like NINE tournaments in China this year.  And for those who don't really follow tennis, they tend not to play tournaments -- let alone nine of them -- in places that can't economically support both the tournament itself and tennis in general.  Li Na, one of the best players in the world, and Aussie Open champ this year is a like a mega-star in China.  Tennis is huge now.

     

    There's a lot of money flowing around in China.

  • Reply 6 of 57
    Quote:



    Originally Posted by Red Oak View Post



    Apple is doomed. Especially in China

     

    The entire article is about Apple's unexpected success in China's high-end smartphone market.

     

    How can you say that "Apple is doomed" when they have been increasing their market share in the U.S. and now China, too.  Right now, Apple has 41.6% of all U.S. smartphone subscribers, up 1% from the previous quarter.  They outsell Samsung, their closest competitor, by 45% to 26%. In the desirable high-income, advanced degree market in the U.S., Apple outsells all other smartphones combined. 

     

    Could you provide the rationale for your claim?  Or were you being sarcastic?

  • Reply 7 of 57
    dickprinterdickprinter Posts: 1,060member
    Quote:

    Originally Posted by Fred Maxwell View Post

     

     

    The entire article is about Apple's unexpected success in China's high-end smartphone market.

     

    How can you say that "Apple is doomed" when they have been increasing their market share in the U.S. and now China, too.  Right now, Apple has 41.6% of all U.S. smartphone subscribers, up 1% from the previous quarter.  They outsell Samsung, their closest competitor, by 45% to 26%. In the desirable high-income, advanced degree market in the U.S., Apple outsells all other smartphones combined. 

     

    Could you provide the rationale for your claim?  Or were you being sarcastic?


    "Apple is doomed" is a popular line used when good news about Apple and their devices is released. It comes from the fact that, lately, no matter if the news is good or bad, AAPL, the stock, makes a turn for the worse.

     

    Folks stopped using the /s to denote sarcasm after saying it because it has become understood that "Apple is doomed" no matter what the news.

  • Reply 8 of 57
    lkrupplkrupp Posts: 6,704member

    But we’ve been told over and over that Apple has failed in China because it doesn’t have a cheap phone for emerging markets. You mean that’s not correct?

  • Reply 9 of 57
     

    The entire article is about Apple's unexpected success in China's high-end smartphone market.

    How can you say that "Apple is doomed" when they have been increasing their market share in the U.S. and now China, too.  Right now, Apple has 41.6% of all U.S. smartphone subscribers, up 1% from the previous quarter.  They outsell Samsung, their closest competitor, by 45% to 26%. <span style="line-height:1.4em;">In the desirable high-income, advanced degree market in the U.S., Apple outsells</span>
    <span style="line-height:1.4em;"> all other smartphones combined. </span>


    Could you provide the rationale for your claim?  Or were you being sarcastic?
    "Apple is doomed" is a popular line used when good news about Apple and their devices is released. It comes from the fact that, lately, no matter if the news is good or bad, AAPL, the stock, makes a turn for the worse.

    Folks stopped using the /s to denote sarcasm after saying it because it has become understood that "Apple is doomed" no matter what the news.

    It was trademarked here at AI.

    Sadly, reflecting the times -- whence not many people seem to give much of a hoot about IP issues -- no one bothers with the 'Apple is doomed™' any more. :\
  • Reply 10 of 57
    Quote:

    Originally Posted by lkrupp View Post

     

    But we’ve been told over and over that Apple has failed in China because it doesn’t have a cheap phone for emerging markets. You mean that’s not correct?


     

    I've never understood the mentality of people who say things like that. It's like claiming that Mercedes is doomed because they don't have a cheap subcompact for emerging markets, or that Louis Vuitton is destined to fail because they don't have a line of $30 purses for low-income women. You don't maintain a premium brand image by selling low-end, cheap products.  

     

    It's why Nissan, Toyota, and Honda had to create the Infiniti, Lexus, and Acura brands respectively. Customers in the market for upscale, luxury vehicles don't want something wearing the same badge as a Sentra, Yaris, or a Civic.

  • Reply 11 of 57
    tooltalktooltalk Posts: 766member
    Quote:
    Originally Posted by 512ke View Post



    Wait a minute!



    27% of cell phones in China are high end



    And 80% of those are iPhones



    Therefore, 21.6% of cell phones in China are iPhones?



    And that was BEFORE the Apple/China Mobile deal?



    Huh? Am I making a dumb math mistake, or is that like the biggest news for Apple ever?

     

    Yep, this is somewhat nonsensical.

     

    The same report goes on to say there are about 700M active smartphone users in China.  Of these, about 21.6% or 140+M are active iPhone. LOL!!   Apple hasn't sold that many iPhones in China -- so unless there is a huge secondary iPhone market in China we don't know about, this number is a complete bull. 

  • Reply 12 of 57
    aaronjaaronj Posts: 1,595member
    Quote:

    Originally Posted by tooltalk View Post

     

     

    Yep, this is somewhat nonsensical.

     

    The same report goes on to say there are about 700M active smartphone users in China.  Of these, about 21.6% or 140+M are active iPhone. LOL!!   Apple hasn't sold that many iPhones in China -- so unless there is a huge secondary iPhone market in China we don't know about, this number is a complete bull. 


     

    There is a massive black-market.  Well, the black-market isn't as huge as it once was, now that all the major carriers in China sell the iPhone.  But before China Mobile, and before the others, there were still a lot of Chinese with iPhones.

  • Reply 13 of 57

    LOL... more nonsense by Dilger aka "corrections"

     

    Here is your daily dose of reality, sheep:

     

    Apple Inc (AAPL) First Quarter Performance a Disaster? Analyst Warns of Stock Crashing

     

    http://au.ibtimes.com/articles/543351/20140314/apple-inc-aapl-stock.htm

     

    "Apple Inc is on its way to a disastrous first quarter for Fiscal Year 2014 as analyst Brian Blair of Wedge Partners delivers the bad news about the company's Q1 performance. According to Mr Blair, Apple may be having a bad first quarter. He warned investors that Apple's stock could crash after the company releases its first quarter earnings. Mr Blair blames Apple Inc's continued slowdown in the smartphone market with no low-end product to compete in emerging markets where cheaper Androidphones have become popular. The cheaper iPhone 5C, according to Mr Blair, only has a "soft" demand compared to its premium cousin theiPhone 5S. Another reason to expect a disastrous first quarter for Apple is the low expectation of a new product and a phone upgrade weakness."

  • Reply 14 of 57
    aaronjaaronj Posts: 1,595member
    Quote:

    Originally Posted by CanUHearMeNow View Post

     

    LOL... more nonsense by Dilger aka "corrections"

     

    Here is your daily dose of reality, sheep:

     

    Apple Inc (AAPL) First Quarter Performance a Disaster? Analyst Warns of Stock Crashing

     

    blah blah blah snipped


     

     

    You seriously made yet another account just to post this?  Like, really?

     

    Wow.

  • Reply 15 of 57
    paxmanpaxman Posts: 4,591member
    Quote:
    Originally Posted by Constable Odo View Post

    I honestly don't see how anyone can say that Apple is a better company than Google is when Google has the strongest backing on Wall Street.  Market share remains the most important measure of how well a company is doing and Apple looks pretty sick based on shrinking market share.  Doesn't it make sense that investors put their money on a company that looks like a winner?  Apple certainly does not look like a winner from an investor's point of view.  I have no doubt that Apple is making the most revenue and profits at the moment but nearly everyone claims those days are practically over.  I'm a long-term Apple shareholder but even from my point of view Apple seems like a struggling company with nearly no one backing the company.  It's never been said that Google is a dying company.  Apple holds that title.  Apple definitely doesn't get any respect as a company without Steve Jobs around.  Tim Cook doesn't seem fit to be Apple's CEO.  Apple seems to be throwing away so many opportunities to give itself a solid future despite sitting on a huge mountain of cash.  I've just about given up on Apple as the company looks like it's being run into the ground.


     

    Yes, this will to end in tears. Only 80%? Clearly a company in decline. Beleaguered, I tell ya. In free-fall.

  • Reply 16 of 57
    jungmarkjungmark Posts: 6,647member
    512ke wrote: »
    Wait a minute!

    27% of cell phones in China are high end

    And 80% of those are iPhones

    Therefore, 21.6% of cell phones in China are iPhones?

    And that was BEFORE the Apple/China Mobile deal?

    Huh? Am I making a dumb math mistake, or is that like the biggest news for Apple ever?

    27% of smartphones are $500+. Not all cell phones in China.
  • Reply 17 of 57
    Quote:
    Originally Posted by Red Oak View Post



    Apple is doomed. Especially in China

     

    Doomed indeed. This is horrible news. I bet the analysts will call it a disappointment and scream that it's time to sell hard and fast…they were probably expecting 80.5%

  • Reply 18 of 57
    Quote:
    Originally Posted by Fred Maxwell View Post

     

     

    The entire article is about Apple's unexpected success in China's high-end smartphone market.

     

    How can you say that "Apple is doomed" when they have been increasing their market share in the U.S. and now China, too.  Right now, Apple has 41.6% of all U.S. smartphone subscribers, up 1% from the previous quarter.  They outsell Samsung, their closest competitor, by 45% to 26%. In the desirable high-income, advanced degree market in the U.S., Apple outsells all other smartphones combined. 

     

    Could you provide the rationale for your claim?  Or were you being sarcastic?

     


     

    My guess is the later. It had sarcasm written all over it. 

  • Reply 19 of 57

    not sure where that 700M number come from. but one thing for sure is that lot of iPhone users in china are starting to have 2 iPhones in hand: one for regular usage, while another one is reserved exclusively for banking/online payment etc. online payment over phone is very good in china, but ppl lost confidence on security. 

     

    of course, these folks can afford iPhone and money is not issue for them as i guess.

     

    Originally Posted by tooltalk View Post


     

     

    Yep, this is somewhat nonsensical.

     

    The same report goes on to say there are about 700M active smartphone users in China.  Of these, about 21.6% or 140+M are active iPhone. LOL!!   Apple hasn't sold that many iPhones in China -- so unless there is a huge secondary iPhone market in China we don't know about, this number is a complete bull. 


  • Reply 20 of 57
    lostkiwilostkiwi Posts: 583member

    I was staggered at how many iPhone users I saw around in Shanghai.  I know anecdotes are not worth much, but there it is...

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