Apple retook its spot as China's fifth largest smartphone vendor in the first quarter, as the country's market grew to triple the size of the U.S.'s.
Apple had an 8 percent share of the smartphone market, while Samsung continued to lead all vendors with a 20 percent share, according to research firm Canalys. Trailing behind Samsung were Yulong Computer Telecommunication Scientific, Huawei, and Lenovo.
In last year's third and fourth quarter, Apple fell to the sixth spot. But iPhone 5 sales, along with price cuts to older iPhone models, propelled the company's smartphone shipments in China's intensely competitive market, said Nicole Peng, an analyst with Canalys.
Samsung and Apple were the only two foreign companies to rank among China's top ten smartphone vendors. In the first quarter, about 68 percent of all shipments to the nation's market were from domestic vendors, Peng said. Smartphone popularity in China is soaring to the point that the market now dwarfs the U.S.'s. Vendors shipped 82 million smartphones to the Chinese market during the quarter, but only 27 million to the U.S.
"In Q1 of last year, they were neck-and-neck," she said. "But now it's completely different. China is like a completely different world."
Low-cost smartphones, priced from 400 yuan (US$64) to 700 yuan, are helping to drive the high shipment volume. China Mobile, the country's largest mobile carrier with 726 million customers, is also heavily promoting new phones built for its 3G network.
Samsung was one of the companies to benefit from China Mobile's push, Peng said. The Korean handset maker shipped its most phones ever in China in the quarter, with its Galaxy Note II, Galaxy S3 and mid-range models selling well.
Apple, however, will need to release a cheaper version of the iPhone to attain more market share in China, Peng said. For example, a 2,000 yuan ($323) iPhone model would appeal to budget-conscious consumers who want an Apple branded product. The iPhone 5 currently starts at 5,288 yuan, while the 8GB iPhone 4 model goes for 3,088 yuan on Apple's online store in China.
In the first quarter, China's smartphone shipments were up 156 percent year-over-year, Peng added. It is the only smartphone market in the world to have over a 100 percent year-over-year growth in the past five quarters.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.