In China, Apple Doesn’t Rule. Samsung Does

By Xavier Bremner

Apple (AAPL) has enjoyed an incredible run over the last week. First, it shattered the all-time market capitalization record of about $616.3 billion held by Microsoft (MSFT). (As of August 27, Apple was valued at $621.7 billion.) Then came Apple’s $1 billion patent victory over Samsung that may result in a U.S. sales ban on a variety of the South Korean giant’s smartphones.

However, in another important arena it is Samsung that enjoys the upper hand. China’s smartphone market is experiencing blistering growth rates and is set to overtake the U.S. as the world’s largest later in the year.

Samsung and a host of Chinese manufacturers like Lenovo now dominate the market with their smartphone products. Apple? It didn’t even crack the top five players in terms of market share during the first half of 2012, according to data compiled by HIS iSuppli Research. Samsung led the pack with a 20.8%.

Make no mistake: Apple is wildly popular in China. But its iPhones can cost close to $800, out of the reach of most Chinese families. “The sweet spot of affordability in China is 800-1,500 yuan ($130-$240),” Michael Clendenin, managing director of Shanghai-based consultancy RedTech Advisors, told Reuters.

Reuters also reported data from research firm IDC estimates that shows that smartphones costing less than $200 made up 40 percent of the Chinese market. Devices costing $700 and more accounted for 11 percent of the market, according to Reuters.

Bottom line: the Apple and Samsung rivalry in the smartphone and tablets is a multi-faceted one and prosecuted around the globe. A court victory in the U.S. isn’t going to change that reality.