Telecom & Wireless
Apple iPhone Market Share Surges in China, as Smaller Vendors Dominate
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China-based smartphone companies cannot hold back the popularity of Apple Inc.’s (NASDAQ: AAPL) iPhone 6. Because of the new product, Apple has taken huge market share away from its two primary rivals in the People’s Republic, and the trend will continue. Apple’s primary rival is what research firm Strategic Analytics calls “other,” which is the category that makes up most of the market.
According to research firm:
China smartphone shipments grew 17 percent annually to reach 110 million units in the first quarter of 2015. Xiaomi maintained first position, but Apple is rapidly closing the gap with 12 percent marketshare in second place
Part of the reason for this is likely Apple’s partnership with China Mobile Ltd. (NYSE: CHL), the largest wireless carrier in the world.
In the first quarter, Apple shipped 13.5 million iPhones and took a 12.3% share of market. Xiaomi shipped 14 million smartphones for a 12.8%. Third place Huawei shipped 11.2 million units, and its market share for the first quarter was 10.2%.
The “other” category, which represents a large number of companies, shipped 71 million smartphones, for a market share of 64.7%.
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For Apple to fulfill its promise to make China by far its fastest growing market, it will have to do more than conquer Xiaomi and Huawei. Apple’s revenue in Greater China was $16.8 billion. America’s revenue was $21.3 billion, of total quarterly revenue of $58 billion. Apple management has hinted that Greater China will pass America’s revenue soon.
So, “other” may be a slew of brands not know outside China. They may have brand awareness, loyal customers or low price points. They may have distribution deals with China’s largest carriers. If Apple wants to win in the People’s Republic, it needs to take a lot of the 64.7% “other” business.
Exhibit 1: China Smartphone Vendor Shipments and Marketshare in Q1 2015 [1]
| China Smartphone Vendor Shipments (Millions of Units) | Q1 ’14 | Q2 ’14 | Q3 ’14 | Q4 ’14 | Q1 ’15 |
| Xiaomi | 10.6 | 14.5 | 17.0 | 15.7 | 14.0 |
| Apple | 7.8 | 5.0 | 4.9 | 13.4 | 13.5 |
| Huawei | 8.0 | 11.9 | 9.6 | 11.9 | 11.2 |
| Others | 67.2 | 70.6 | 73.5 | 82.0 | 71.1 |
| Total | 93.6 | 102.0 | 105.0 | 123.0 | 109.8 |
| China Smartphone Vendor Marketshare (%) | Q1 ’14 | Q2 ’14 | Q3 ’14 | Q4 ’14 | Q1 ’15 |
| Xiaomi | 11.3% | 14.2% | 16.2% | 12.8% | 12.8% |
| Apple | 8.3% | 4.9% | 4.7% | 10.9% | 12.3% |
| Huawei | 8.5% | 11.6% | 9.1% | 9.7% | 10.2% |
| Others | 71.9% | 69.3% | 70.0% | 66.6% | 64.7% |
| Total | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |
| Total Growth: Year-Over-Year (%) | 38.9% | 29.4% | 31.9% | 34.7% | 17.3% |
| Source: Strategy Analytics |
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