China Beats U.S. in Smartphone Activation: Apple in Trouble?

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China Beats U.S. in Smartphone Activation: Apple in Trouble?
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China Beats U.S. in Smartphone Activation: Apple in Trouble?

February was first time ever that China had reported more smartphone activations than the United States. The news signals the end of American dominance in smartphone area.

The latest figures show that March will be the first month in which there were more new iOS and Android devices activated in China than anywhere else in the world. The Chinese market, according to projections, will account for 24% of activations in March. The American market will only account for around 21% of new smartphones. The research was conducted by Flurry a company which specializes in mobile app marketing research and systems.

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The shift hasn’t fully occurred yet. The US market still has the highest numbers of active smartphones. The estimates from Flurry suggest the United States has twice as many devices as China. China is in second however with double the devices of third place UK. China’s huge population, 1.3 billion, is more than four times the size of the United States and the country’s increasing wealth is enabling more and more Chinese citizens to afford mobile computing devices. If the frantic rate of growth in the market there continues the country will surely overtake the US and become the most important country with regard to mobile devices. The change could signal a shift in marketing and in App development.

Apple Inc.’s iOS (NASDAQ:AAPL) devices have underperformed in China compared to the rest of the world. Apple still only has about 7.5% of the market in China which could prove problematic as the Country establishes itself as the biggest consumer of smartphones. The country’s largest carrier, China Mobile, does not offer a 3G standard compatible with the iPhone and so the company was until recently relegated to operating only with the second biggest Telecom provider, China Unicom. The company recently announced a deal to bring the device to a third smaller carrier. Apple’s share of the market there is very small compared to the leader, Samsung, who maintain a 24.3% share.

It remains to be seen whether Apple can redeem itself in the Chinese market. It may be able to sign a deal with the largest carrier if the 4G standard chosen is compatible, if Apple choose to offer that in their next phone. If not, Samsung and other Android competitors could forge ahead with their share of the growing Chinese market.

(Update: China Mobile is the country’s largest carrier, not China Unicom, as previously stated)

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