When Apple posted its quarterly earnings, analysts paid close attention to what the company reported in regard to its China sales. As it turns out, the iPhone performed very well in the country, nearly twice the pace analysts expected. This, in tandem with the growth of budget smartphone sales, has pressured Samsung, now feeling the squeeze.
Reuters points to Samsung’s failing strategy in China: We all know that the manufacturer has a long list of smart devices for sale, which range from cheap to premium in pricing. And it also has strong brand loyalty in China, but there is a major problem — so it seems. It charges 60-100% more than local players charge for smartphones with similar features.
While Samsung warned this month that quarterly earnings could drop 25% due to weak demand for 3G phones and inventory build-up in China, iPhone sales jumped 50% between April and June.
It is worth mentioning that the timing for Apple’s partnership with China Mobile was perfect: The world’s largest carrier deployed its 4G network with a 50 million subscriber base target for 2014. Apple was one of the smartphones compatible with this 4G LTE network, and this benefited both parties.
While China Mobile didn’t break down its current 13 million 4G subscriber base by device or OS, an early March report said the iPhone accounted for the majority of the 1.34 million subscribers using the network at the time.
Apple is confident it will grow further in China with the help of China Mobile and the 150,000 iOS developers making apps for the Chinese App Store.