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IDC: Apple Losing Shares in The Chinese Market, Starts Back in Q2

Apple’s market share with the mobile industry in China has almost halved to 10 percent in the second quart (Q2) according to figures that were released by the International Data Corporation (IDC) today. The numbers released suggest that soon-to-be and existing Apple customers are eagerly awaiting the release of the next iPhone or more commonly known as the “iPhone 5.” The device is expected to release near the middle of September , or jumped the ship entirely in favor of rival smartphones. Lenovo managed to kick Apple off its second place rocker moving it to fourth place in the world’s largest market, despite the fact that smartphones were overtaking “older” phones fro the first during the April to June period.

Lenovo who is based in China, is currently the world’s second-largest PC maker and is soon to be the market leader in only a few weeks. The company managed to snap 11 percent in China during the second quarter of this year. While Lenovo’s share only increased by a disappointing single point in the first quarter of this year, the company decided to jump ahead of Apple during the second quarter. Poor Apple, they are really getting picked on a lot lately aren’t they? First their lack of innovation, then the fact that they weren’t the most valuable company in the world and now they are losing market shares! I almost feel bad for them. Almost.

Lenovo is now standing at 11 percent of the China mobile market share which is up one point from where Apple sits in fourth place. Another Chinese based company, ZTE is currently sitting in third place right above apple while Huawei sits in fifth place under Apple. The Chinese market is quite competitive with how many mobile businesses are there, but it’s actually surprising that Apple managed to lose the “top dog” title in that country. That said, stand clear of the bulldozer, Samsung Electronics has a vast lead on the rest of the market (much larger than Apple does) sitting at a share of 19 percent. While they’re the top dog in town, they have dropped 2 percent in this previous quarter, but they’re still in a vast lead compared to the other companies sitting and 10 and 11 percent.

The International Data Corporation said that smartphone shipments in China have come to a final total of 44 million devices in only the second quarter. They hit around 51 percent of the country’s overall 87 million mobile device shipments, the IDC said. Steven Milunovich, an analyst from The Union Bank of Switzerland (UBS) said earlier this week that most of China’s sales from the iPhone 4S can be all attributed to “seasonality,” notably the widely known and long awaited iPhone 5, which again, is expected to make a big appearance near the middle of September.

Still, Apple’s market dominance isn’t what it could be or even should be. Apple, the Californian based technology giant has around one retail store per 216 million Chinese citizens, which also attributes to a total of six stores for a whopping 1.3 billion people. Cupertino had said that it would have at the very least, 25 stores in China by the end of the year. Despite that, the argument could be that Apple is just simply not known enough in China with all of the other tech giants over there.

Apple earlier claimed that China was really hard to crack. If we compare it to Massachusetts, which has a total of 10 Apple stores for a grand total of 7 million people, there is no question as to why Apple would find China “hard to crack” (thanks to an editor over at ZDNet for this information). Actually, I’m going to go as far as to say that Apple was stupid to say that China was hard to crack with only having a total of six stores in the country. I seriously thought Apple was a whole lot smarter than this when it came to marketing a product. I guess I was completely wrong.

Don’t get me wrong though, the iPhone is by far a failure in China. If you think about it, the iPhone as a bit of a slower production cycle than most phones, there is a difference in spending priorities in China than compared to the U.S, and the really heavy factor with the iPhone is that other smartphone makers in China sell similar or possibly better devices for a whole lot cheaper. It makes the iPhone a luxury that many in China can simply not afford, or that they’ll have to simply wait for.

While this is all very interesting as to how Apple is doing in the Chinese market, it’s not surprise that they are slowly dropping as more smartphones get produced for cheaper. Not to mention that Samsung not only offers some really good cheap phones (they do have some pricey ones) but a lot of their phones have no contract making it a more attractive price in China. Now, that isn’t from the report that was released from the International Data Corporation, but if you imagine the struggle that a lot of Chinese families go through, a cheaper non-contract phone looks a lot more nice than one of those shiny Galaxy S III’s or iPhone 4S’s that want you to get into a two to three year contract. It makes logical sense, considering there are 1.3 billion people in the country and a lot of them without jobs or means of income.

Again, it’s no surprise that Apple’s market shares are dropping in China. We’ll probably see it increase a little bit after their release of the iPhone 5 and after they get those 25 extra Apple stores put in place, but I doubt that the Californian based technology giant has a permanent place in China with Xiaomi, Lenovo, Samsung and some other good phone manufacturers based in China.

All that said, do you think that Apple has a chance at permanent residence in China or do you think their time is limited as more smartphones with better hardware and slicker designs release? Let us know in the comments below!

Source: ZDNet