China has officially claimed the crown of the world’s largest cell phone market, growing 164 percent to 33.1 million smartphones sold last quarter, according to recent data from Needham & Company, the banking and asset management firm. The country topped the US, which sold 25 million smartphones during the same period.
As Apple Insider notes, Needham & Company analyst Charlie Wolf credited the upsurge to China’s competitive prices on smartphones, which were forced to compete with feature phones when they entered the Chinese market.
“The surge in China can be traced in part to the introduction of smartphones at materially lower prices that made them competitive with feature phones,” Wolf wrote in his report. “A material percentage of these sales were captured by second-tier Chinese manufacturers.”
Android took the lion’s share of that market at 69.5 percent of the market, with Apple taking 17.3 percent and Nokia capturing 11.2 percent. Apple managed second place, growing from 9.9 percent the year before, despite not being able to sell through China Mobile, the country’s number one carrier. China Mobile has yet to adopt the iPhone, though competitors China Telecom and China Unicom are already on board.
That hasn’t prevented 15 million China Mobile users from jailbreaking iPhones to enable service, despite a downgrade to 2G due to incompatibility of the service carrier’s network. The two companies are working together to form a partnership, which may take some time as China Mobile’s network doesn’t work well with the iPhone’s mobile radios. Nevertheless, Apple continues to triple its revenue in China every year.
“The iPhone is an iconic brand that virtually sells itself, translating into a subscriber acquisition cost that is far lower than the SAC on competing smartphones,” wrote Wolf.