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December 17, 2012

Apple Market Share Slips as iPhone 5 Hits China Market


Earlier today, China released its iPhone 5. However, being the world's biggest smartphone market, Apple (News - Alert), Inc.’s long-term hopes may depend on new technology being tested by China's top telecoms carrier. For four years, California-based Apple, Cupertino, has been in talks about a tie-up with China Mobile.

To improve Apple's distribution in a market of 290 million users, forecasted to double this year, a deal with China's biggest carrier is seen as crucial step forward.

Bringing in around 15 percent of total revenue, Apple's second-largest and fastest-growing market is China. This clearly means the company is missing out on a large number of phone users, should it fail to strike a deal with China Mobile (News - Alert).

Although Apple's sales increase as the China pie grows, however, compared to other brands, it will lose ground at a faster rate without China Mobile.

"In absolute terms, this (iPhone (News - Alert) 5) launch will certainly result in strong sales for Apple in China. However, in relative terms, I don't believe it will move the needle enough in market share," said Shiv Putcha, a global technology consultant and a Mumbai-based analyst at Ovum (News - Alert).

Earlier today, in Shanghai's financial district, just one person was waiting outside the Apple store when its doors opened at 9 a.m., but earlier this year, with the launch of the iPhone 4, rowdy crowds pelted a Beijing store with eggs.

Initially, China Mobile and Apple said the only thing that separated it was a technical issue. The Chinese carrier runs a different 3G network from most of the world, however, and has evolved into a broader and more complex issue of revenue-sharing.

Li Yue, CEO for China Mobile, stated that many issues – such as the business model, articles of cooperation and revenue division – have to be resolved between China Mobile and Apple and it anticipates reaching an agreement soon.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida.  Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.



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