Apple experiences a slump in China iPhone out of China's Top 5

Apple enjoyed 2nd place in Chinas smartphone market in the first quarter of this year, but have started to see their foothold slip as they dropped down to No. 5 in the second quarter. The 3rd quarter sees a continuation of that trend as Apples iPhone slipped further down to No. 6. Samsung held their grip on the market, keeping 1st place with 14% of the market, and are closely followed by Lenovo who have 13%.

While Apples YOY shipment of smartphones in the 3rd quarter actually increased, it wasnt enough to hold onto their position against the fast pace of local makers, and their market share dropped 1 point from the previous quarter to 7%.

Analysts commented that Chinas electronics market operated on the principle of extreme price wars, and recent low-price high functioning smartphones produced by local makers has stimulated new growth at the bottom end of the market. People who werent interested in buying hi-tech cell phones at Apple prices jumped at the chance to get their hands on some nifty gear at an affordable price.

In the 3rd quarter of this year, Chinas total shipped smartphones amounted to 50,000,000 units. Thats more than 1/3 of all globally shipped units. 60% of these were made by Chinese manufacturers, and as time goes on an even larger percentage of these sales will be eaten up by local manufactures.

The average price for a smartphone in China is currently $70~$120 USD. Compare that to Apples iPhone 4S, which when bought without a contract in China will set you back a hefty $713 USD. Thats almost a full months wages for a lot of locals.

Will the iPhone 5 be Apples savior in China?

Things are not all bleak though, as Chinese sales of the iPhone have yet to feast on the spoils of the iPhone 5, which is scheduled for a December release in the region. Analysts expect the new revision to give Apple another boost in the 4th quarter. Whether or not this will be enough to hold off against the cutthroat competition of the Chinese electronics market though, is yet to be seen.