Apple Smooth Run in China Now Challenged by Smaller Players

December 17, 2011, By Sanjeev

Apple is doing great business all over the world. But, things are not the best in China, where rivals like Samsung, Huawei and Nokia are outpacing the iPhone maker. Why? It’s because Apple devices are not fully supported by the Chinese networks.

Apple Smooth Run in China Now Challenged by Smaller Players

Even the network of China Mobile Ltd., which is the country’s largest state-owned telecom with 600 million subscribers, is not fully compatible with the iPhone and iPad. And other players in the market happily support the mobile standards in China.

It’s Apple’s relatively rigid global pricing structure and limited range of models that stand out as the major reasons. People in China do not use their mobile phones for much more than voice and messaging; only a tenth even use 3G.

Numbers tell more. Apple’s smartphone market share shrank to 10.4 percent in the third quarter from 13.3 percent in the previous quarter. Samsung’s shot up to 19.2 percent from 14.6 percent and Huawei to 11 percent from 7.3 percent.

Despite all that, Apple products have a huge demand in the Chinese market, so much so that there are fake stores pushing. Network is the issue.

Jane Wang, an analyst at UK research firm Ovum said that a good strategy for Apple would be to try and seal deals as soon as possible with the other two China telecom operators.

It is quite meaningless for China Mobile and Apple to sign an agreement based on the current TD-SCDMA network. Using the 4G TD-LTE technology that China Mobile is developing will be more feasible, according to Kevin Wang, research firm iSuppli’s director of China research.

Is Apple listening?

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