Apple Inc. (AAPL)’s Down in China, but Far From Out

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Samsung recently took the top spot for smartphone market share in China, leaving Apple Inc. (NASDAQ:AAPL) behind in the No. 3 spot. Apple Inc. (NASDAQ:AAPL) may not be king in the largest smartphone market in the world, but its profits, and demand, speak for themselves in the country.

Who’s who in Chinese smartphones
Samsung’s whopping 30 million smartphone sales in China last year deserves a tip of the hat. The company surged from 10.9 million sales in 2011 to 300% increase in 2012. But despite the huge sales gain, the company took only an additional 5.3% of the smartphone market share. Granted, that was enough to stay ahead of Apple, which currently holds 11%. Here’s the breakdown of smartphone market share by sales.

Source: VentureBeat.

While it’s obvious Chinese consumers are willing to put a Samsung device in their pockets, investors can look beyond market share to some more concrete numbers: revenues.

In 2011, Apple’s sales in China were $4.08 billion. In 2012, that number increased by 67% to $6.83 billion. That’s a significant increase in sales in the region, considering its growth in North and South America was 15% and 13% in Europe. But one of the most important facts to remember is that Apple Inc. (NASDAQ:AAPL) isn’t even on China’s largest mobile network, China Mobile Ltd. (ADR) (NYSE:CHL) . Samsung and Lenovo, who lead in smartphone sales market share, both have deals to sell phones on China Mobile. Meanwhile, Apple Inc. (NASDAQ:AAPL) has managed to claim the third spot without any deal with the company — but it’s coming.

Apple Inc. (NASDAQ:AAPL) wants its iPhone available to China Mobile’s 700 million customers, and China Mobile wants to officially offer the coveted and social status-raising iPhone. As China Mobile’s 3G network grows, both companies cannot wait much longer to strike a deal. At the 2012 China Mobile Worldwide Developer Conference, the company’s president said about working a deal with Apple: “Technology is not a problem, [it's] mainly about business model and benefit-sharing issues.” It’s high time Apple Inc. (NASDAQ:AAPL) and China Mobile worked out some sort of deal.

As of this time last year, about 15 million China Mobile customers used their unlocked iPhones on the company’s 2G network. With millions of Chinese consumers already unofficially using new iPhones on China Mobile’s network, it shows how much demand there is for a China Mobile iPhone.

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