Apple's iPhone keeps raking in the majority of smartphone profits (Part 4 of 5)
Apple replicates its developing market success in emerging markets
In the last few parts of this series, we’ve been discussing the success Apple (AAPL) has achieved over the years not only in developed markets but also in emerging markets. There was never any doubt about Apple’s ability to succeed in developed markets, but there were some doubts in emerging markets. Some analysts were concerned that Apple’s stubbornness in not introducing a cheaper iPhone specifically for emerging markets could be detrimental to the company’s growth. However, those concerns have now been averted, as Apple continues to increase its market share in the premium smartphone segment in China. According to a report from Umeng, China’s largest analytics firm, for 2013, 27% of China’s smartphones sold for over $500, and 80% of those were iPhones.
The Android market is fragmented
According to the same report from Umeng, China’s brand distribution of active Google (GOOG) Android devices as of Q4 2013 is quite fragmented. Samsung (SSNLF) and XiaoMi (a local brand) prove to be the most popular Android brands, as between them, they manufacture the top-ten active Android devices. As per the above chart, Samsung holds 24% market share among all Android devices in China, Lenovo and Huawei each hold 8% share, XiaoMi holds 7% share, and brands such as BlackBerry (BBRY) and Sony (SNE) each hold less than 3% share.
Android fragmentation is good news for Apple
As we’ve seen, there are hundreds of smartphones based on the Android operating system in China. Samsung has the highest market share, at 24%. However, this means Apple doesn’t have a single most competent opponent that can challenge the company. If we calculate the individual market shares for Apple and Samsung in the overall Chinese smartphone market, assuming the data provided by Umeng is true, they will come out as 21.6% and 18.8%, respectively. This means Apple has already beaten Android’s highest-selling smartphone maker, Samsung, by some margin. This gap could increase even further if we consider the gains that Apple could see from its recent partnership with China Mobile (CHL) and the impending launch of the iPhone 6 this year.
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