iPhone 5 hits China, as Apple market share slips

Thu Dec 13, 2012 3:53pm EST
 
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* Despite big, fast-growing market, Apple has roadblocks in China

* China Mobile tie-up may take years, hinges on TD-LTE - analyst

* iPhone 5 has 300,000 pre-orders via China Unicom

* Full impact of China launch seen in Apple's Jan-March qtr

By Melanie Lee

SHANGHAI, Dec 14 (Reuters) - The China release of its iPhone 5 on Friday should win Apple Inc some respite from a recent slide in its share of what is likely already the world's biggest smartphone market, but its longer-term hopes may depend on new technology being tested by China's top telecoms carrier.

Cupertino, California-based Apple has been in talks about a tie-up with China Mobile for four years. A deal with China's biggest carrier is seen as crucial to improve Apple's distribution in a market of 290 million users - which is forecast to double this year.

China is Apple's second-largest and fastest-growing market - it brings in around 15 percent of total revenue - but the company's failure to strike a deal with China Mobile means it is missing out on a large number of phone users. As the China pie grows, Apple's sales increase, but without China Mobile, it's losing ground at a faster rate compared to other brands.

"In absolute terms, this (iPhone 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 Mumbai-based analyst at Ovum, a global technology consultant.   Continued...