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Big screens - key to selling more iPhones in China?

Big screens - key to selling more iPhones in China?

Apple's share in China's burgeoning smartphone market faces increasing competition from local players, but a trend towards large-screen phones could give the tech giant a boost, according to IDC.

On Tuesday, Apple (NASDAQ:AAPL - News) unveiled its latest offerings - the iPhone 6 and iPhone 6 Plus, which respectively have 4.7 inch and 5.5 inch screens - far larger than the current 4-inch iPhone 5s.

Apple will tap a growing preference for large-screen smartphones in China, IDC said in a report.

Read More Apple shows off new iPhones, payments, watch

"There is a higher proportion of the younger generations (generation Y and X) [in the population]. The way they use smartphones is different, the percentage using voice is a lot smaller and they tend to use text more, watch video, play games or even buy things... so naturally they'd like to use a bigger-screen phone," said Kitty Fok, China managing director at IDC.

In 2013, over 20 percent of China's smartphone market owned larger-screen phones - those with 5 to 7-inch screens - and IDC expects this to increase.

Demand from China's lower-tier cities is also driving demand for large-screened smartphones, Fok said. Users in more mature markets located in the tier-1 and 3 cities tend to own both a smartphone and a computer, Fok said, but users in tier-4 and 6 cities tend to have one device for all of their digital needs.

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Cities in China are divided up into tiers to reflect population size, development of services and infrastructure, economic size and the cosmopolitan nature of the city. Cities in the higher tiers, such as Shanghai, a tier 1 city, tend to be more developed than a lower tier city like Fushun, a tier 4 city, for example.

"In tier 4-6 cities in China, without full popularization of PCs and tablets, smartphones are often the only devices for people to keep daily connection and entertainment, so bigger screen is more attractive," she added.

But in terms of affordability, Apple may struggle to compete with local players offering larger screens.

Local smartphone makers in China such as Xiamoi provide a wider variety of larger-screened phones at more affordable prices than international brands, IDC said, catering directly to this market segment.

These local players are reaping the benefits. Domestic player Xiaomi became the leading smartphone vendor in China in the second quarter with a 14 percent market share, knocking Samsung from the top position, according to a report from market research firm Canalys. Samsung had a 12 percent market share, while Apple's was 6 percent.

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Despite increasing competition, Apple has a loyal customer base in China, said IDC's Fok, who estimates there to be around 50 million iPhone users in China.

The iphone 6 launch could prove perfect timing, she said, especially with its Chinese customer base on the cusp of a "replacement wave."

"The customer base for Apple is there, so we are expecting a replacement market for the existing Apple user," said Fok.

"If the new iPhone 6 is going to be on a big screen size option, it is likely to keep the current Apple users, as the users already familiar with the user interface and Apps...The screen size is really one thing which is missing for Apple users in China at the moment," she said.

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Globally, Samsung remained the world's largest smartphone provider in Q2 with 26 percent market share, ahead of Apple's 12 percent, Huawei's 7 percent. Lenovo and Xiaomi both had 5 percent shares.

Earlier this month, Samsung launched the 5.6-inch Galaxy Note Edge and the 5.7-inch Galaxy Note 4.

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