A new report from Gartner may paint the real picture as to why Apple has been so aggressive in trying to halt the onslaught of Samsung and Android. The "writing on the wall" could be the emerging markets in China. Apparently, Samsung already has a massive lead on Apple in China, to the tune of over three times Apple's marketshare there. Samsung owns 24.3% of the market to Apple's 7.5%; these numbers put Samsung in first place by a large margin in China, with Apple sitting in 5th place. This is further compounded by the fact that China is expected to overtake the U.S. this year as the largest smartphone market in the world. This makes it very important to Apple to improve their competitiveness in China, if they want to hold on to their largest smartphone maker in the world crown.
Things are not completely gloom and doom for Apple, as they have recently inked deals with China Telecom to market iPhones with them. This means that Apple is now marketing with the number two and number three phone carriers in China, and demand in China has been quite high. In fact, Tim Cook recently made statements suggesting that Apple may have miscalculated the demand in China. He said, “We thought we were betting bold. We didn’t bet high enough.” Indeed, this may very well be the case as according to the Bloomberg article, even though China Mobile doesn't have an agreement to sell iPhones, there are still almost 15 Million of them in use on their network because users will buy unlocked iPhones and simply surf using slower 2G speeds or utilize WiFi networks.
Still, Samsung already has a substantial lead as they have already been selling their smartphones with every carrier in China, including the nation's largest operator China Mobile, for some time. This is what has given them such a commanding lead. Here's a comment from Gartner analyst Sandy Shen, “I don’t expect Apple to replace Samsung any time soon. China Telecom is the nation’s smallest carrier, so the extent to which they can help Apple is quite limited.”
Meanwhile, Samsung is almost ho hum on the subject. Juha Park, senior vice president of product strategy at Samsung recently said that Samsung's approach to China is “the same” as other markets, “We make product innovation and make our brand very desired in the market. That’s what we do to become a major player. We have been doing quite strong growth in the China market.”
Source: Engadget and Bloomberg
Kinda reminds me of that joke: Your mother is so ugly she was kicked out of the Ugly Contest, "Sorry, amateurs only."
