Apple Nabs No. 1 Smartphone Spot In China Market For First Time

Apple topped China's smartphone market for the first time, according to a new study from research firm Canalys.

Analysts expect a strong smartphone showing when Apple reports its 2015 first-quarter earnings Tuesday, due to the September release of the iPhone 6 and iPhone 6 Plus.

While Apple has previously lagged behind Samsung and Xiaomi in the Chinese market, Canalys analysts noted that the "incredible popularity" of the iPhone 6 and 6 Plus in China's fourth quarter of 2014 enabled Apple to turn the tables and take the top spot.

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Canalys analysts attributed the success to Apple's priority on Chinese consumer demands for large screens and LTE technology, coupled with a well-timed launch.

"I think it's an amazing achievement that Apple has managed to overtake Samsung and Xiaomi in the Chinese market," said Canalys analyst Chris Jones. "Apple had a broader carrier distribution with the launch this year as opposed to the single carriers it had in previous launches. There was also a consumer desire in the Chinese market for larger screens, and I think Apple did a nice job addressing that."

The achievement was especially interesting because of Apple's high price range compared with other vendors, he noted.

"Apple surpassed both Samsung and Xiaomi despite higher pricing levels," said Jones. "I think one of the driving reasons for that is the status symbol of having an iPhone. That, coupled with a fast-growing middle class in China, played into the success of the iPhone 6 and 6 Plus."

The top four vendors with highest smartphone shipment levels in the fourth quarter in China were Apple, Xiaomi, Samsung and Huawei.

Raul De Arriz, national government sales manager for Apple specialist Small Dog Electronics, Waitsfield, Vt., said a number of factors contributed to Apple’s success in the Chinese market.

"The iPhone seems to have been very popular in China when it came out," he said. "Everything I've heard said that the Chinese market likes a large tabletlike phone, so that aspect of the iPhone seems to be very popular. This also marks the first year Apple had products in China that began within a timely basis. This will be the first fourth quarter that is impacted by China sales through all the main providers."

Analysts are anticipating Cupertino, Calif.-based Apple to beat estimates by a wide margin when it reports its first-quarter earnings later Tuesday.

The Wall Street consensus is for earnings per share of $2.59 on sales of $67.5 billion for the quarter, according to Thomson Reuters. That compares with earnings per share of $2.07 on sales of $57.95 billion in the same quarter one year ago.

"I would expect a good report with strong iPhone and Mac sales," De Arriz said. "In the U.S., sales for the iPhone 6 and 6 Plus have been very strong. It is uncanny how many people already have the new phones.’

PUBLISHED JAN. 27, 2015