Apple Passes ZTE in China Smartphones to fifth place with 5% market share, behind Samsung (14%), Lenovo (13%), China Wireless’ Coolpad (11%), Huawei (9%)

November 6, 2013 Leave a comment

Apple Passes ZTE in China Smartphones With IPhone Early Release

Apple Inc. (AAPL) captured fifth place in China’s smartphone market in the third quarter, surpassing ZTE Corp. (000063) and Xiaomi Corp., after it included the Asian nation in the latest iPhone’s global debut. Shipments of the iPhone rose 32 percent year-on-year to hand Apple 6 percent of the country’s smartphone market in the three months ended September, Nicole Peng, the China research director for Canalys, said in a phone interview today. Cupertino, California-based Apple had ranked seventh, with a 5 percent share, in the second quarter, she said.Samsung Electronics Co. (005930) widened its lead after shipments more than doubled to give the Suwon, South Korea-based company a 21 percent share of the world’s largest smartphone market, according to Peng. Apple, which had previously sold the iPhone in China three months or more behind its U.S. release, in September offered the iPhone 5s and lower-cost 5c in China as part of the global debut to give its sagging share a boost.

“In the third quarter, Apple was able to move up in China helped by the fact that the market was part of the first wave of the new iPhone launch,” Peng said. “The impact was pretty big, and that helped them to gain market share and move up in the rankings. For Apple, to continue to move up from here is going to be quite challenging.”

The market data reflects only a little more than a week of sales of the new iPhones during the third quarter, as the devices went on sale Sept. 20. Apple posted a year-on-year drop in share from 8 percent in the third quarter of 2012, Peng said.

Samsung’s market share rose from 14 percent a year earlier, Peng said.

Lenovo Group Ltd. (992), based in Beijing and Morrisville, North Carolina, kept its second place with an unchanged market share of 13 percent, as shipments gained 64 percent, she said.

The Coolpad brand of Shenzhen-based China Wireless Technologies Ltd. (2369) held third place with 11 percent share, as shipments gained 85 percent, Peng said.

Huawei Technologies Co. in Shenzhen was fourth maintaining its 9 percent share of the market, after shipments climbed 65 percent, she said.

Xiaomi, based in Beijing, more than tripled shipments from a year earlier to claim the sixth spot, Peng said.

ZTE’s market share was cut in half to 5 percent, from 10 percent a year earlier, dropping the company to seventh place, Peng said. David Dai, a spokesman for Shenzhen-based ZTE (763), declined to comment on the market share.

“ZTE had a tough time in their product transitional period,” Peng said. “They are trying to raise their brand profile and price segment.”

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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