Android reported to be overwhelming leader in China

[John Kotches]

This article is from Android central, but they ate referencing a report from elsewhere that Android has 2/3 of the smartphone market in China and outselling iOS at nearly 10:1.

I cant vouch for the accuracy, but if it's true that's a huge win for Android and there many manufacturers, many price points strategy.

Here's the source link:

http://m.androidcentral.com/android-eating-apple-china-huge-market-share

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[Symbol]

Remember we're talking about China, the home of 99.99% of fake non-branded android devices.

 

[mike123abc]

It is believable. The iPhone costs a years wages for most in China. They are mostly sold in the richest parts of the big cities. Apple does not cut the price for China, so most Chinese cannot even begin to think about affording one of them.

 

[rockymtnhigh]

And how many of them are running Froyo or Eclair?

 

[John Kotches]

And how many of them are running Froyo or Eclair?

Does it matter? As was pointed out at this time Apple is prohibitvely expensive for the vast majority. Until they are in the game at the low end they well cede market share in at least one of the top 2 markets in the world. If India is also seeing the same thing they are ceding the market on roughly one third of the world's population.

I do understand the "Big Fruit" strategy though. At the low end, users are much less likely to purchase from the app store or iTunes. And 30% of zero is zero.

I just thought the statistic (if accurate) was interesting.

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[rockymtnhigh]

No, it does not matter, and the preponderance of cheap phones in China running whatever OS doesn't cause me to lose much sleep, at all. I am sure that for the poor - and in China - that is an ASTRONOMICAL number - it would make sense that the percent you found makes sense. I'd be interested in seeing the % breakdowns of the MUCH smaller, but quite affluent class that exists in China. But really, not so much that I'd take time to try to find the numbers.

 

[mike123abc]

Does it matter? As was pointed out at this time Apple is prohibitvely expensive for the vast majority. Until they are in the game at the low end they well cede market share in at least one of the top 2 markets in the world. If India is also seeing the same thing they are ceding the market on roughly one third of the world's population.

I do understand the "Big Fruit" strategy though. At the low end, users are much less likely to purchase from the app store or iTunes. And 30% of zero is zero.

I just thought the statistic (if accurate) was interesting.

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Well Apple probably feels that if they cannot afford the phone they will not be able to afford the apps, or they will jailbreak and steal the apps...

 

[yourbeliefs]

It comes down to price. Believe me, EVERYONE in China wants an iPhone. My wife gets asked by her relatives at least once every 6 months if we can get them an iPhone because it's too expensive there. When you compare the prices directly, an iPhone purchased in the US is comparable to what it is in China. The biggest issue is that wages are so low in China that it's a major burden to justify such a purchase. And don't forget, in China (from what I've seen) there are NO carrier subsidized phones.

The biggest thing Android has going for it there is that it does (generally more or less) everything that an iPhone does but it's generally much cheaper. Bear in mind though that if you want a top of the line Android like the latest Galaxy line or something similar, you'll be paying about the same amount as an iPhone, but at that point the average Chinese consumer likely decides to just get the iPhone if all things are equal.

 

[John Kotches]

Well Apple probably feels that if they cannot afford the phone they will not be able to afford the apps, or they will jailbreak and steal the apps...

I said that in my next to last paragraph.

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[John Kotches]

Yourbeliefs :

IMO, carrier subsidies go a long way towards the rate of adoption of smartphones in the US. Would they be everywhere without the 2 year contract and the 200-300 subsidy?

Smartphones at the high-end are expensive to produce. The pricing and the high ETF reflect that. The cost has to be recouped some way or another.

Cheers,



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[mike123abc]

I said that in my next to last paragraph.

Sorry, misread what you had said. I thought you were implying that since they did not sell them an iPhone they were not getting any app store revenue.

 

[John Kotches]

Since we're having a good discussion, let's discuss some numbers:

Approximate Chinese population, 1.3 Billion. If we consider the affluent portion of the Chinese population to be 1%, that's only a market of 13 million people. Not that that's nothing, but it isn't that much either. That's roughly the population of the state I live in (Illinois).

Is this a long-term winning strategy for Apple?

 

[mike123abc]

With only 13 million having the money vs the billion in the rest of the world that could afford it, why waste too much time in that market. Yes it might be a billion people, but for now they are poor.

By the time China has a decent standard of living that could afford luxury items like the iPhone, the iPhone may no longer exist....

 

[rockymtnhigh]

Since we're having a good discussion, let's discuss some numbers:

Approximate Chinese population, 1.3 Billion. If we consider the affluent portion of the Chinese population to be 1%, that's only a market of 13 million people. Not that that's nothing, but it isn't that much either. That's roughly the population of the state I live in (Illinois).

Is this a long-term winning strategy for Apple?

I think your 1% number is WAY WAY off.

THis article suggests more like 19% -

Luxury Spending: China's Affluent Entering "Enjoy Now" Phase of Consumption | Worldwatch Institute

Overall, private spending on consumer items in China has grown at an annual rate of 12 percent over the past five years. Yet China remains on the whole a country of low consumption. Per capita consumer spending totaled 4,150 yuan ($500) in 2004, and the nation's consumption-to-GDP ratio was only 50 percent between 1996 and 2004, lower than the world average of 80 percent. As the Chinese government includes expanding consumption as a key goal in its eleventh five-year economic plan, it is also taking actions to narrow the country's rich-poor divide, including amending income tax laws to close loopholes that enable companies to evade payment.

Given that China's consumer class currently represents only about 19 percent of the national population—compared with 95 percent in Japan and 89 percent in Europe—it has significant potential to expand its ranks over the coming decades. Although the average Chinese still consumes far less than the average North American or European, as the global demand for goods and services skyrockets, this could have serious implications for the planet's natural resource base, notes Worldwatch Senior Editor Lisa Mastny.

 

[John Kotches]

rocky:

I have no idea what the numbers are. At ~20%, that's roughly a US sized market which is sizable. But without phone subsidies is it really going to be 20%, or will it be less?
I'm trying to get a feel for the "reachable" size of the market, i.e. those that are able to purchase the product. From there, it becomes a matter of how many that are able are willing.

I'm not an economist, I'm not a marketing guy, but if I were these are the types of questions I'd be asking.

 

[rockymtnhigh]

John, I don't know what the numbers are either -- and its not easy to determine, but I suspect that the reality is there is a HUGE market of really really poor folks, but given the population of 1.3B, a market of affluent Chinese who would rival most countries. I do know, from the work of Tom Friedman that when you look at the number of PhDs that China and India are producing, it creates a HUGE pool of talent, and I doubt most of them are in that subsistence-level existence.

But China/east Asia is not my area of specialization at all.

 

[yourbeliefs]

Actually they DO have some subsidies, but they're not the best. You can get an iPhone 4s for free in china but you have to sign a 2-3 year contract and the monthly price of service is like paying over $100 a month. Or at least you COULD a few months ago. They may have changed it.

 

[truckracer]

i have used iphones since they came out. i have owned every model and jailbroken them. i have to say since i have an android with ice cream sandwich OS I like it best. just my opinion. I doubt i would ever go back to an iphone.

 

[John Kotches]

We all value different things. For iPhone, ease of use wins out for many users.

For me, the ability to tweak to my hearts content is important. A I I prefer Android.

I'm hoping Apple doesn't take the Mac platform down the iOS path and locking it down.



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[yourbeliefs]

We all value different things. For iPhone, ease of use wins out for many users.

For me, the ability to tweak to my hearts content is important. A I I prefer Android.

I'm hoping Apple doesn't take the Mac platform down the iOS path and locking it down.

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It appears they're well on their way of doing that and turning OSX into iOS..

This Is How Apple Will Use Mountain Lion's Gatekeeper to Crush Competitive Apps
Another Crystal Clear Sign That OS X Is Going to Die Really Soon