Apple (AAPL) Loses Smartphone Market Share in China...Again
Shares of Apple (Nasdaq: AAPL) are trading pleasantly higher Friday morning despite reports the company lost some presence in China for the second straight quarter.
With many consumers in the rapidly growing market turning to cheaper alternatives, Apple slipped to fifth place in China's smartphone market, losing ground to local producer ZTE. Apple's fourth-quarter share slipped 2.9 points from 10.4 percent to just 7.5 percent.
Also losing market share was global mobile device leader Nokia (NYSE: NOK), which unapologetically gestured to Samsung as the South Korean device maker surpassed the Finnish OEM for top-spot in China.
The news makes sense; Apple's iPhone costs nearly three-times the price of other devices. What's more, last week research firm Gartner said it expects the iPhone 4S to continue losing market share as the novelty wears off.
There is a potential reversal to its fortune, analysts are beginning to say. Apple might be able to expand its presence should the company be able to land the iPhone on another carrier in China. The device is currently only available through China Unicom (NYSE: CHU), but a deal to work with China Telecom (NYSE: CHL) may be at the bargaining table. Those are the number two and three carriers in the country behind China Mobile (NYSE: CHL), which itself boasts over 100 million potential smartphone customers.
Amid the drop, Apple may need to be more consumer friendly. In January, many will recall the "egging incident" in China as some customers who waited for hours -- and even days -- were distraught to learn there would be a lack of iPhone 4S devices available. Apple eventually canceled the sale of the iPhone 4S at its stores (though it was available at other retailers), but resumed just a few days later. Additionally, there was a huge drag between the U.S./European launch of the iPhone 4S and when it debuted in China.
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With many consumers in the rapidly growing market turning to cheaper alternatives, Apple slipped to fifth place in China's smartphone market, losing ground to local producer ZTE. Apple's fourth-quarter share slipped 2.9 points from 10.4 percent to just 7.5 percent.
Also losing market share was global mobile device leader Nokia (NYSE: NOK), which unapologetically gestured to Samsung as the South Korean device maker surpassed the Finnish OEM for top-spot in China.
The news makes sense; Apple's iPhone costs nearly three-times the price of other devices. What's more, last week research firm Gartner said it expects the iPhone 4S to continue losing market share as the novelty wears off.
There is a potential reversal to its fortune, analysts are beginning to say. Apple might be able to expand its presence should the company be able to land the iPhone on another carrier in China. The device is currently only available through China Unicom (NYSE: CHU), but a deal to work with China Telecom (NYSE: CHL) may be at the bargaining table. Those are the number two and three carriers in the country behind China Mobile (NYSE: CHL), which itself boasts over 100 million potential smartphone customers.
Amid the drop, Apple may need to be more consumer friendly. In January, many will recall the "egging incident" in China as some customers who waited for hours -- and even days -- were distraught to learn there would be a lack of iPhone 4S devices available. Apple eventually canceled the sale of the iPhone 4S at its stores (though it was available at other retailers), but resumed just a few days later. Additionally, there was a huge drag between the U.S./European launch of the iPhone 4S and when it debuted in China.
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You are not telling the whole story
You failed to mention that the iPhone 4s was not effectively in those numbers because it did not go on sale in the quarter you are speaking about. So, just like there was a drop in percentage for Apple in the US the quarter before it came out, you could (should have said) that it is reasonable to assume that the percentage will go up in the current quarter now that the iPhone 4s is now available in China.
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Interesting observation, Les
Info Dave on Feb 17, 2012 10:22 AMMark as Spam
Glad to see ace reporters of your caliber, still on the job. Once again, the story behind the story is more important than the story being told.
Thanks for being on job. My best to Herb, Johnny and the Big Guy.
BTW, compare Apple's Q3 iPhone sales (17M) to Q4 (37M). We might want to wait a quarter to pass judgement.