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Even If Apple Gets China Mobile, China Still Likes Android. Apple Should Consider a Budget Phone.

Smartphones are making their mark on China, and it is no joke for Apple that a majority of these phones are Android. This year the figures show that 40-50 million smartphones were sold in the last quarter, while the US only sold 19 million. The iPhone 5 should hit the Chinese market in the next month or two, yet Apple has some work to do. They have China’s wealthy genteel, but they are losing the masses.

This should come as no surprise, given the abundance of cheap Android phones on the market, yet it is worth noting that Android is vastly outnumbering the competition, not only in China, but in the world.

Forbes provides the following chart as a demonstration:

This week, their numbers show that among the estimated 180 million smartphones in China, approximately 120-130 million of them are Android phones. Figures released recently by UMeng also say there are as much as 200 million smartphones in China.

Of the 500 million estimated Android phones being used worldwide, this means that approximately a quarter to a third is in China.

Though Google services in China are spottily available at best, it is no insignificant fact that a majority of Chinese users prefer Android. Samsung is still the top contender, and their phones all provide Google applications, while Chinese manufacturers ZTE, Lenovo, and Huawei bring up the rear (according to Canalys).

A significant thorn in Apple’s side has been incompatibility with China Mobile’s TD-SCDMA 3G services. Though the iPhone 5 reportedly is compatible with China Mobile, my prediction is that even if Apple works with China Mobile, there will be no China Mobile scramble to buy the phones.

I base this prediction on my assumption that most China Mobile users who want to use an iPhone are already using it on 2G services anyway, and that a vast majority of users are still price-conscious. China Mobile currently has 700m of China’s 1.1bn mobile users. The numbers will increase for Apple, but it will not be a blowout as much as some believe.

Though China’s wages are increasing and people will are more willing to buy smartphones, it is just almost just as likely that they will purchase Android phones instead of the iPhone.

If Apple seriously wants to capture China’s market, they need to make a budget phone. It is something they should seriously consider, even if it would not be good for their branding in the long term. Otherwise they might be left behind.

Source: Forbes

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