Despite landing its second iPhone carrier partner in China last week, Apple is still struggling to combat Samsung’s smartphone lead in the country, which has around three times Apple’s market share.
The big problem for Apple, as Bloomberg points out, is that it still doesn’t have a partnership with China’s largest carrier, China Mobile. That carrier’s 3G service is incompatible with the iPhone, but there’s certainly demand for Apple’s smartphone among its customers. China Mobile already has 15 million unofficial iPhone users who hacked their phones to make them run on its network (despite having to suffer through slower 2G speeds).
China Mobile could finally land the iPhone with the launch of its LTE 4G network at the end of the year, according to the company’s chairman Wang Jianzhou. But there’s still nothing official in place with Apple.
After initially offering the iPhone on China Unicom in 2010, Apple began selling its flagship smartphone on China Telecom’s network last week. Apple currently has a 7.5 percent share of China’s smartphone sales, compared to Samsung’s 24.3 percent share, according to numbers from Gartner. Samsung has access to China’s entire population of 988 million mobile users, while Apple’s partnerships with the second- and third-largest carriers only give it access to around 34 percent, Bloomberg reports.
China is undoubtedly a huge and untapped market for Apple. It’s also worth noting that the 25th billion iOS app was recently downloaded in China — a major milestone for Apple, and a clear indicator of China’s growing importance for the company.
Just like in the U.S., Samsung took on the Chinese market by working together with all of the country’s major carriers starting in 2009. Meanwhile, Apple was flat-footed with its approach into China. It finalized a deal with China Unicom in 2009, but the carrier didn’t get the iPhone until the release of the iPhone 4 in late 2010. Apple has also had to stop selling the iPhone in its own stores temporarily, after the iPhone 4S launch drew some unruly crowds in January.
China Mobile’s LTE network could finally give the iPhone a foothold on its network, but its 4G subscriptions will still cost more than its 3G pricing. That gives Samsung’s 3G smartphones a big price advantage in the eyes of many consumers. And Apple can also expect stiff 4G competition from Samsung once China Mobile’s LTE network gets going.