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Video Bomb-proof bins for London streets Robot sings, dances and helps with homework Singles turn to love online "Solid Rain" brings relief to Mexico Follow Reuters Facebook Twitter RSS YouTube Read REFILE-Al Gore takes aim at "unsustainable" capitalism 16 Feb 2012 New Jersey Assembly passes gay marriage bill 12:44am EST Whitney Houston Death Jokes Earn a Suspension for Radio Duo 16 Feb 2012 Colbert Report abruptly suspends production 16 Feb 2012 Exclusive: Venezuela ships fuel to war-torn Syria 16 Feb 2012 Discussed 255 Obama proposes $800 million in aid for ”Arab Spring” 242 It’s bailout or chaos, PM Papademos tells Greece 134 REFILE-Al Gore takes aim at ”unsustainable” capitalism Watched Huge baby shocks parents Tue, Feb 7 2012 Humanoid robot makes storefront debut in Valentine's experiment Fri, Feb 10 2012 Ships trapped in frozen Azov Sea Wed, Feb 15 2012 Apple's iPhone loses China market share Tweet Share this Email Print Related News Nvidia warns of chip supplies and loss of Samsung Wed, Feb 15 2012 Apple falls, drags Wall Street lower Wed, Feb 15 2012 Exclusive: Proview says any ban of iPad exports hard to impose Wed, Feb 15 2012 Euro falls, U.S. stocks retreat as Apple falls Wed, Feb 15 2012 China to keep investing in euro zone debt: China central bank Wed, Feb 15 2012 Analysis & Opinion Tech wrap: Apple iOS apps to require “explicit” OK to share your contacts Tending to China-US relations Related Topics Tech » Media » China » iPad » A policeman looks out from a balcony as the crowd is dispersed from the front of an Apple store in the Beijing district of Sanlitun January 13, 2012. Credit: Reuters/David Gray By Lee Chyen Yee and Huang Yuntao HONG KONG/BEIJING | Fri Feb 17, 2012 2:24am EST HONG KONG/BEIJING (Reuters) - Apple Inc's share of China's booming smartphone market slipped for a second straight quarter in October-December, as it lost ground to cheaper local brands and as some shoppers held off until after the iPhone 4S launch last month. China, the world's largest mobile phone market, has not been easy for Apple, which is grappling with a lawsuit from a local firm over the iPad name and issues at its suppliers' factories over wages and working conditions. With the number of mobile subscribers set to top 1 billion in China this year, there is cut-throat competition among South Korea's Samsung Electronics Co Ltd, Nokia, Apple and local firms Huawei Technologies Co Ltd and ZTE Corp. While Apple regained its top spot as the world's largest smartphone vendor in the fourth quarter and for last year as a whole, it slipped to 5th place in China, overtaken by ZTE. Apple's China smartphone market share slid to 7.5 percent from 10.4 percent in July-September. In the last quarter, Samsung knocked Nokia off the top slot, taking 24.3 percent of the market, more than three times Apple's share, data from research firm Gartner showed. Nokia's market share more than halved last year, from above 40 percent in the first quarter to below one fifth by the fourth quarter. "Chinese handset makers have been actively promoting their smartphones with China's three telecoms operators, so we saw ZTE and Huawei gain significant market share," said Taipei-based Gartner analyst CK Lu. Gartner said this week it expected Apple's iPhone market share to slip for a couple of quarters as the novelty of its latest 4S model wears off. In the first quarter of last year, ZTE had a market share of just 3 percent, but ended 2011 ranked 4th with more than 11 percent market share. Chinese firms are gradually shifting up towards the higher end of the market, unveiling more feature-packed smartphones. "If you want to sell handsets to the mass market, a simple rule of thumb in China is that the handset price has to be close to 70 percent of the monthly salary," said Jayesh Easwaramony, an analyst with Frost & Sullivan in Singapore. "Today, an iPhone is more than two months salary." This, said Easwaramony, gives the likes of Huawei and ZTE the opportunity to cater to a mass market that is captivated by the iPhone, but doesn't have the purchasing power for it. VALUE FOR MONEY "The quality of Huawei's phones is quite high and it's good value for money compared to the iPhone," said Dale Dai, a 28-year-old sales executive from Beijing. Dai, who uses his Huawei phone to write weibo, or Chinese microblogs, surf the Internet and make calls, recently bought a new Honor smartphone for 1,800 yuan ($290), almost a third of the price of a new iPhone 4S at 4,988 yuan. But given the sheer size of the Chinese market, just targeting the highest end users should be enough for Apple, though it's not always been a smooth ride. Last month, shoppers in Beijing threw eggs at the Apple store and fought with police when they were told the iPhone 4S would not be on sale as scheduled. In Shenzhen, some genuine iPhones and iPads are smuggled in from Hong Kong, while sellers also take advantage of Apple's popularity by packaging fake iPhones in iPhone 5 boxes - even before the 4S was launched. In Hong Kong, Apple resorted to an online lottery reservation system for the 4S model after crowd control issues disrupted initial sales. Analysts expect Apple to stem its slide in market share in China by signing up another carrier. China Unicom, the country's No.2 telecoms operator, is currently the only carrier to officially carry the iPhone. It has not officially given its iPhone sales, but analysts estimate it has sold around 3 million iPhones since signing a contract with Apple in 2009. China Telecom Corp Ltd, the third and smallest operator, is expected to be next to clinch a similar deal with Apple later this year, and analysts predict it would sell about 1.4 million iPhones this year if it can reach a deal with Apple by May, rising to 2-4 million new iPhone users in 2013. ($1 = 6.3016 Chinese yuan) (Reporting by Lee Chyen Yee in HONG KONG and Huang Yuntao in BEIJING; Editing by Ian Geoghegan) Tech Media China iPad Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (1) sirberra wrote: Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Advertise With Us Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile About Privacy Policy Terms of Use Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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