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China is Apple's fastest growing market for iPhone

By Michael Kan
April 21, 2011 06:16 AM ET

IDG News Service - While Apple's iPhone is selling well across the globe, China has emerged as its fastest growing market for the device.

In a conference call on Wednesday, Apple Chief Operating Officer Tim Cook, said that for the first three months of 2011, iPhone sales in "Greater China" grew by almost 250% from the same period last year. This brought Apple's revenues in the first fiscal half to just under $5 billion for the Greater China market, an increase of almost four times from 2010.

The $5 billion generated represents about 10% of Apple's revenues, Cook added in the conference call. "So we're extremely happy with how we're doing in China," he said. In the U.S., iPhone sales grew by 155%.

It's unclear, however, where in China the device is selling the most. Cook's reference to Greater China includes the mainland, Hong Kong and the island of Taiwan, said Apple spokeswoman Carolyn Wu.

But analysts have said that in mainland China, Apple is seeing a major shift with how consumers are viewing the iconic smartphone. When Apple's iPhone 4 launched there in late September, it was a hit with Chinese consumers, quickly selling out and leading to shortages.

Earlier versions of the iPhone had not met with the same reception, said Mark Natkin, the managing director for Beijing-based research firm Marbridge Consulting.

Apple didn't officially begin selling the iPhone in mainland China until late 2009, more than two years after it was launched in the U.S. Even then, the iPhone sold in the country was designed without Wi-Fi capability, in order to comply with Chinese technology regulations at the time.

"Eventually Apple was allowed to offer the iPhone with Wi-Fi functionality," Natkin said. "But by the time they were allowed to do so, the global launch of the iPhone 4 was just some months away. So again many users just waited for the right time."

The iPhone 4's appealing features and user interface have made it an attractive smartphone for buyers in China, Natkin said. Furthermore, the device is a status symbol in China, he added.

"If you look at the Apple experience store in Beijing, it's packed everyday," he said. "People have a very high regard for the Apple brand and for its ability to innovate."

But even as Apple's COO noted the strong sales of the iPhone in China, the device is far from becoming the dominant presence in the country's smartphone market.

At the end of 2010, Apple had 8.3% of China's smartphone market, an increase from the 5.4% it held at the beginning of the year, according to Beijing-based research firm Analysys International. Nokia, Samsung and Motorola continue to lead in the market.

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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