China is Now the World's Largest Smartphone Market

Nokia is the top seller in China, Samsung is close behind; meanwhile HTC and Apple top U.S. ranks

For those awaiting with bated breath China passing the U.S. as the world's richest (e.g. highest GDP) nation, here's a sign of the times that may interest you. China has unofficially passed the U.S. [press release] to become the world's largest smartphone market.

China has long seen much higher cell phone use than the U.S. -- understandable given that China has 1.34 billion people, compared to the U.S.'s 0.31 billion residents. But until this year the U.S. was the world's biggest market for smartphones.

No more; the U.S. is now only the second biggest market. Strategy Analytics reports 23.9 million units (+58% versus Q2 2011) sold in China in Q3 2011, compared to 23.3 million units (-7% from Q2 2011) sold in the U.S. for the quarter.

Strategy Analytics researcher Tom Kang comments, "China's rapid growth has been driven by an increasing availability of smartphones in retail channels, aggressive subsidizing by operators of high-end models like the Apple iPhone, and an emerging wave of low-cost Android models from local Chinese brands such as ZTE."

In a sign of hope for Finnish-phonemaker Nokia Oyj. (HEL:NOK1V), the report indicates it to be the top seller of smartphones in China, with a 28.5% market share. Close behind was South Korea's Samsung Electronics Comp., Ltd. (KS:005930) who owned 17.6% of the Chinese market.

Approximately 54% (12.9 million phones) of smartphones sold in China were sold by "Other" (the publicly available form of the report did not include a breakdown of this information). Past reports indicate that China-based ZTE Corp. (SHE:000063) may have shipped between 4 and 5 million smartphones in Q2 2011, mostly to China. Huawei was listed as another top domestic smartphone producer in China.

Apple, Inc.'s (AAPL) iPhone may be a bit further behind, but it is fast gaining ground. Currently its being held back largely by the fact that its available exclusively on China Unicom, Ltd. (SHA:6000050), China's second largest network. China Unicom has about 170 million subscribers and primarily uses the GSM standard.

China Mobile, Ltd. (HKG:0941) is much bigger with 600 million subscribers, almost all using CDMA devices. Apple is expected to soon launch its (relatively) new CDMA iPhone on China Mobile. The launch should greatly boost Apple's market share in the world's biggest smartphone market.

iPhones and iPads have become status symbols among Chinese youth, ones which some would quite literally give an organ for.

Strategy Analytics states that in the U.S. Taiwan's HTC Corp. (TPE:2498) was king, with 24.0% of the market (5.6 million units), while Apple was in second with 20.6% (4.8 million units) of the market. Samsung was presumably close behind, although its sales might have been a bit lower due to a tardy U.S. rollout of its flagship Galaxy S II smartphone.
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