Why Are Smartphone Makers Bowing to China?

It’s no big secret that China is the next market of importance for phone and tablet manufacturers, but new numbers show just how big the country already is. A report finds that in the first quarter, China made up for as much as 22 percent of all global smartphone shipments. The figure for the U.S. was a clearly less-impressive 16 percent. Just a year earlier, the division had been tilted the other way around. This is also the first time that China sales overtook those in the U.S. In addition, of the top-10 countries for smartphones, half now happen to be in the Asia-Pacific region.

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The Canalys report also finds that total global shipments grew 45 percent to 146 million units year-over-year. However, shipments in the US rose just 5 percent, while the growth rate for entire Asia-pacific region together was 81 percent. Shipments in China doubled.

Apple’s (NASDAQ:AAPL) rising popularity was a big contributor to the growth in China, though Samsung remains the biggest smartphone seller in the country. “As well as seasonal factors, such as the Lunar New Year, the iPhone’s arrival at two of the country’s carriers helped boost volume and raised Apple’s share to 19 percent,” Canalys’ Nicole Peng said.

Samsung’s share in China was 22 percent compared to Apple’s just-under-20 figure, but the latter does not yet have an iPhone deal with the country’s largest wireless carrier: China Mobile (NYSE:CHL). “Its [Samsung’s] wide range of localized devices helped increase uptake across all carriers, and it combined this with significant marketing spend to drive consumer awareness,” Peng added.

Nokia (NYSE:NOK) dropped to third place in the country, while local manufacturers ZTE, Huawei, and Lenovo are next on the table with their lower-priced Google (NASDAQ:GOOG) Android devices.

Apple’s potential of growth in the country can also be gauged from the fact that Android continues to be operating system of choice in China. Two-thirds of the smartphones sold in the country in the first three months of the year were Android phones. More than a quarter of worldwide Android sales came from China. An obvious reason for Android’s popularity is in the proliferation of third-party app stores that offer applications that are built for the local consumer.

“Third-party app stores are ubiquitous on Android devices in China, to a degree not seen anywhere else in the world,” Canalys’ Tim Shepherd said. “If the big international app store providers want to attract Chinese consumers, they must quickly reach the point where they can offer a large selection of good-quality, locally relevant apps and content.”

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