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Summary:

China may be Apple’s next frontier for smartphone growth, but the company has some catching up to do. Android handsets that cost one-third of the iPhone have taken the market by storm: Android now accounts for 90.1 percent of the smartphone market in China.

Google China
photo: Corbis

Apple has repeatedly noted that China is an area of focus for the company, and why not? It’s the most populous nation on the planet with more than a billion mobile phone subscribers. Based on recent data reported by Chinese research firm, Analysis International, which has tracked smartphone sales for the past several quarters, Apple may have a challenging time replicating the market share success its iPhone has seen in other countries: In the third quarter of 2012, Android accounted for 90.1 percent of all smartphone sales in China.

Wired’s editor-in-chief, Chris Anderson tweeted out the data, which we found through Thomas Morffew on Google+ and the chart is stunning when you see Android’s rise since the second quarter of 2011. It’s also notable how fast Nokia’s Symbian platform declined over the same period.

I can understand the Symbian decline, but was surprised to see Android’s continual ascent into dominance. Then I saw what’s the mostly likely reason: Device cost.

Analysis International also tracked the average selling price of handsets by platform and that helps explain the situation. While costs for all smartphones have been decreasing in China, the average Android handset costs about one-third that of an iPhone. In the most recent quarter, for example, an Android handset costs 1393 Yuan (US $223.36) on average. The average price for an iPhone is 4523 Yuan (US $725.25), or roughly three times the cost.

I wouldn’t expect most of the Android devices in the Chinese market to be flagship smartphones or high-end devices, but that may not matter as Chinese consumers migrate to their first smartphone. A low- to mid-end Android model is surely more capable than the phone its replacing. And perhaps this situation shouldn’t have surprised me after all. Just two years ago, I noted that Android was poised to power the next 500 million web users in India, the second most populous nation.

I suspect Apple will still sell more than enough iPhones in China to add billions of profit for the company. But any ideas of iOS taking a large portion of the market in China — or India, for that matter — have to be tempered due to the fast growth of Android.

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  1. Android devices are not just “cheap” — crucially, simultaneously they are better.

    1. iPhones are better. iPhone and its previous models have been the number one selling model of phones for years (with the exception of last quarter when people stopped buying them in anticipation of the new model release)

      I prefer the iPhone to my galaxy s3. Does that make the iPhone better? No. Consumers voting with their dollars do. Android sells more phones because there are hundreds of different models, sizes, shapes, yet the top 3 selling models consistently have a lower case “i” I front of their name.

      iPhone is ergonomic, intuitive, powerful, beautiful, and well supported by developers, apple support, and even consumers

  2. If China occasionally blocks access to Google, and 90.1% of Chinese smartphones run Android, then I’d guess that a huge part of Android’s Chinese market share hardly touches Google apps or services after purchase and activation. Which makes you wonder what portion of Android’s overall market share is productive for Google in other than a defensive role (denying share to Apple, Bada, etc.).

  3. Do I understand correctly, that majority of this devices don’t have Google Play access?

    1. Android users in China have access to thousands of apps via their local app stores like apk.hiapk.com, mumayi.com, appfun.cn, ggm.3g.cn, android.159.com and many more.

      1. You didn’t answer her question. She was specifically referring to having access to Google’s Play store for music, video, apps, & books.

  4. You do realize that iphone in q3 had only 13.9-14.9% global market share (depending who’s numbers you trust) so the difference is not all that huge.
    In China not being on China Mobile hurts them the most.High prices,locked ecosystem (only 1 App store, no microSD slot and so on) and proprietary connectors hurts them further.
    As for India ,it’s not much of a market for smartphones yet, Latin America is far more important for now.Apple will do well with the ipad mini in China. iphone 5 launch+maybe a China Mobile deal will boost is share short term.
    Apple is doing great only in english speaking nations where the free PR provided by the american mainstream press is working well for them.In Q3 40% of their revenue was from the US,if you add UK,Australia and a bunch on other smaller english speaking nations you realize that they are getting only about 50% of their revenue from about 70% of the TAM (non-english speaking nations).

  5. China and India are full of poverty and those citizens buy what they can afford. Symbian devices used to be the cheapest a person could buy. Now Android smartphones are even cheaper than that. You can buy some cereals in China and inside the box is a free Android smartphone. A number of years ago nearly everyone in China rode a bicycle. They were cheap and practical. The Android smartphone has become the bicycle of smartphones in China. However, just as hardly anyone in China aspired to owning a bicycle, they used them out of necessity. What they really wanted was cars. People in China aspire to Apple products and iPhones but not everyone can afford them.

    Android smartphones are just like toilet paper. People use them and they’ll be just as quick to toss them down the toilet when they’re done with them, just like what happened to Symbian phones. Most Chinese Android smartphones are nothing but cheap crap and that’s why Android has 90% market share in China. The whole Chinese phone market is flooded with cheap Android crapphones and there’s nothing much for anyone to brag about. Very little profits are being made and probably less than half of them are sanctioned by Google. Just because there’s more cockroaches than humans on the planet, it doesn’t mean they’re in control over anything except fallen table scraps just like Android devices are. Apple will make good revenue in China from just a tiny market share. Good enough.

    1. You need to check your stat again. China’s smartphone (not mobile phone) market is now 30% bigger than the US’s.

    2. “You can buy some cereals in China and inside the box is a free Android smartphone.”

      “Android smartphones are just like toilet paper.”

      “Most Chinese Android smartphones are nothing but cheap crap and that’s why Android has 90% market share in China.”

      “Just because there’s more cockroaches than humans on the planet, it doesn’t mean they’re in control over anything except fallen table scraps just like Android devices are.”

      Wow. This story must have pissed you off something awful.
      Honestly, if you polled Chinese people owning Android phones, I don’t think they would consider them toilet paper, or crap. Sure, they are not as fast or as well built as the latest iPhone model or higher end Android phones, but so what? That’s not what they are switching from, and that’s not what they will compare them to. They are switching from cheap Symbian phones, and compared to those, these phones are probably 5 years ahead in capabilities.

      That’s why Android has 90% market share. It has nothing to do with bicycles or toilet paper.

    3. You cannot say Android devices are like toilet paper compared to iPhones. For the money you pay, iPhone are inferior. For example, the HTC Butterfly is a hogh-end Android phone with a quad-core CPU, 2 GB RAM, 440 ppi display, and 2100 mAh battery capacity compared to the iPhone 5’s dual-core CPU, 1 GB RAM, 330 PPI display, and 1400 mAh battery.

  6. Android is the replacement for Symbian which was the commodity OS. Since these are the cheap handsets don’t assume that they are all as good as the Galaxy IIIS. The majority a more like a beefed up feature phone.

    1. Exactly. I have been saying for a long time that Android sales numbers are misleading. They definitely aren’t all SIIIs being sold. A lot of cheap crap is being sold analogous to all the crap laptops with Windows being sold.

  7. You’re still trying to tell Audi to “catch up” to Chevy. That may sound meaningful to the Android True Believers commenting here, people still putting money on the Microsoft plate…even Paulistas praying for a return to the gold standard.

    Next week, I’ll probably buy a few more underpriced shares of AAPL.

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