China is now the world’s largest Android smartphone market

China flag map

Just how important is China to the top two smartphone platforms: Google’s Android and Apple’s iOS? The Asian nation is now the largest single market for Android, with the United States a distant second. What’s more, half of the smartphones sold in America next year could be Android-powered unless Apple “makes radical changes to its aging iOS”, one research firm warns Tuesday.

China is rushing to turn in their feature phones for more powerful smartphones, according to Informa Telecoms & Media. Smartphones grew at an 85 percent clip compared to 2011. That’s nearly double the 45 percent year-over-year growth worldwide. Just in 2012 alone, an astounding 786 million smartphones were sold in the 1.33 billion people market…

The rapid growth of smartphones in China is nearly all fueled by Android handsets. A 50 percent penetration of sales during the first half of 2012 will reach 75 percent by year’s end, the researchers estimate.

Apple’s current five percent share of the country’s smartphone market could actually fall in 2013 if the iPhone maker “does not manage to create a TD-LTE variant”.

TD-LTE, or Time-Division Long-Term Evolution, is a radio technology used by China Mobile, the world’s largest carrier with whom Apple has yet to cut an iPhone distribution agreement.

Meanwhile, Microsoft could see its share of China’s smartphone sales double from one to two percent in 2013, thanks to Nokia’s partnership with China Mobile.

While the forecast appears bleak for Apple in China, today’s report does not factor in a number of unknowns which could help Apple compete in a market largely driven by low prices.

Among the unknowns:

  • the impact of Apple’s record-breaking sales of 2 million iPhone 5 handsets during the first three days in China
  • whether Apple’s release of a $99 iPhone 4S and a free (with contract) iPhone 4 will counter cheap Android phones in China
  • the huge customer base available if Apple signs China Mobile in 2013

The research firm also paints a dreary landscape for Apple at home.

Apple Store (Wangfujung, Beijing, exterior 003)

According to the findings, it expects Android to “consolidate its position further in the US to such an extent that one in every two handsets sold in country in 2013 will be powered” by the Google software.

The cure: “radical changes to [Apple’s] aging iOS, particularly to the user interface” which the firm said hasn’t changed in six years.

Principal analyst Malik Saadi writes:

Although Apple has upgraded the hardware of the iPhone 5, only a little has been done on the software side.This situation could lead to even the most ardent Apple fans churning as they become disillusioned with using the same UI framework for more than six years.

In fact, iPhone sales in the US could drop to 34 million in 2013, down from 35.5 million in 2012.


I’m reminded of the saying that numbers can be tortured to prove any point.

iPhone 5 launch in China 001

In the case of Apple, those forecasting a slide into oblivion focus on the numerical advantage of Android handsets while Apple supporters respond that the firm has in its favor percentages of users (as opposed to Android handsets bought and gathering dust), percentages of retained customers and – most enviably – percentage of profit.

But Android could have an unlikely Achilles heel both in China and in the US.

According to Informa, nearly half – 41 percent – of  “Android” smartphones sold in China actually use “alternative application frameworks” from local mobile firms like China-based search engine Baidu, e-commerce firm Alibaba and handset maker Xiaomi (in November, Xiaomi acquired an eReader and Apple app creator, according to The NextWeb.

Yulong CoolPad N900
Inexpensive Android handsets and local brands like the pictured Coolpad are slowing Apple’s growth in China.

By comparison, Apple retains its ecosphere of hardware, app stores and iTunes.

Additionally, in the US, Android’s lead could peak by 2016, and even fall due to a “more aggressive penetration” by mobile operating systems like Windows Phone, according to the research firm.

I don’t think Apple (or its supporters) should sweat the much-heralded future of Android ‘domination.’  The percentages are in Apple’s favor.