Marketing-Generics | Blog | {iPhone becomes pervasive in China

iPhone becomes pervasive in China

Image for iPhone becomes pervasive in China

Everyone is on their iPhone!

The market data may say that Apple iPhone sales in China slipped in Q4 and that Apple is #4 in the smartphone market, but one's eyes tell a different story, as almost everyone seems to have an iPhone, and certainly is the phone to be seen with.  Its incredible the extent to which iPhone is succeeding in the Chinese market. 

I know that the data says that market share fell a bit in 4th Qtr and that Apple is 4th in China smartphone market (behind Nokia, Samsung and Huawei), but in practice nearly everyone I met or saw had iPhone rather than the competition, and one couldn’t help feeling that it’s simplythe phone to have and be seen with.  As an example, working last week with a group of (33) Chinese managers, an incredible 85% had iPhone.  Maybe that’s what one might except among the affluent city-young and professional classes, but I also saw guardians and shopkeepers with iPhones, and that means that its appeal is becoming very widespread indeed.  Landing at the airport yesterday, surrounded by Chinese of all ages, simply everyone I saw had an iPhone. 

The iPhone 4S is now available in China and since Apple signed a distribution agreement with China Unicom we can expect to see Apple sales growing rapidly.  China is now Apple’s largest market and will continue to grow, although as the ASP for smartphones falls below 2000RMB (around 300USD) and whereas a basic iPhone 4 is 4000RMB, we can expect to see other vendors increase their market share, at the expense of Apple, but if Apple can maintain their iconic status and ASP, the growth and revenue opportunities are there are enormous.  And of course, iPhone users are likely to go on to buy Apple laptops, iPads, and so on, thus increasing further Apple’s iconic appeal. 

Smartphones grew by 53% in China in 2011 to 24million units, making China overtake the US in 2011 as the largest market for smartphones, and IHS is forecasting smartphone shipment growth in China of 25,9% CAGR between 2011 and 2015 compared to global CAGR of 20,7%, and with over 900 million subscribers in China the opportunity is huge. Total sales volume in China is projected to grow to 153 million phones (all devices) in 2012 according to Strategy Analytics, so China will be very interesting market to watch.

Posted on: Friday, January 13, 2012