No. 1 in Japan, Apple targets China

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No. 1 in Japan, Apple targets China

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Samsung Electronics is facing a tougher challenge in the East Asian market as archrival Apple continues to push a more aggressive sales strategy in the region.

Apple seized as much as 76 percent of Japan’s smartphone market in October, according to Kantar Worldpanel ComTech, a market data provider.

Apple’s feat in Japan, a country of 127 million people, was largely thanks to a partnership reached in September with NTT DoCoMo, Japan’s biggest mobile carrier. Samsung’s Galaxy smartphones, on the other hand, ended up with an 8 percent market share in October.

Apple is seeking to replicate the same formula of success in China through a sales deal with China Mobile, the world’s biggest carrier.

The Wall Street Journal reported on Thursday that China Mobile, which has about 740 million subscribers, reached an agreement with Apple to sell iPhones starting later this month. There has been no official announcement from either company regarding the deal, with Reuters reporting on Friday that talks are still under way. But market observers say it is not a matter of if but when Apple will partner with China Mobile after years of efforts by the American tech giant to expand its presence in the world’s most populous country.

According to Strategy Analytics, an ICT data analysis firm, Apple’s share in China’s mobile phone market was a meager 4.1 percent in the third quarter, while Samsung was leading at 20.4 percent. That makes Apple the seventh-largest phone vendor in China, trailing Chinese rivals Lenovo, Coolpad, Huawei, Xiaomi and ZTE. Samsung’s share in the global smartphone market in the same quarter was 32.1 percent, compared with 12.1 percent for Apple, according to Gartner.

But Morgan Stanley earlier predicted that Apple could increase the market share of iPhones in China by 6 percent through a sales agreement with China Mobile. The number of iPhone users in China is forecast to reach 20 million by next year.

Doh Hyun-woo, an analyst at Mirae Asset Securities, said the Apple-China Mobile deal could double Apple’s sales in China.

Apple’s efforts to secure a deal with China Mobile have gotten a boost from the Chinese government’s decision on Wednesday to license long-term evolution (LTE) fourth-generation (4G) smartphones. That makes it more imperative for China Mobile, the only Chinese mobile carrier not selling the iPhone, to sell the iPhone to meet growing demand for 4G smartphones.

Samsung is also trying to use the licensing of LTE service to its advantage.

China Mobile Chairman Xi Guohua, who met with his counterparts from SK Telecom and KT in Seoul this week, visited the headquarters of Samsung Electronics in Suwon, south of Seoul, on Friday, where he met with Shin Jong-kyun, president of Samsung Electronics mobile division.

His visit allegedly was mainly to discuss the supply of LTE phones from Samsung. China’s LTE phones function on the TDD, or time division duplex, system as opposed to the FDD, or frequency division duplex, system used in Korea, the United States and Japan. Samsung began introducing LTE-TDD products this year.

Samsung said it will continue its marketing efforts in Japan and China.

“We will reflect consumers’ needs and opinions in each country and release specialized products,” said an official at Samsung Electronics.



BY MOON GWANG-LIP [joe@joongang.co.kr]

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