Apple 2.0

Covering the business that Steve Jobs built

Smartphone growth in China: Others first, then Samsung and Apple

July 27, 2013: 8:22 AM ET

Tracking the meteoric rise of Lenovo, LG, ZTE, Huawei, Alcatel et al.

Click to enlarge.

Click to enlarge.

FORTUNE -- "How Samsung is beating Apple in China," read the headline on the Reuters newswire Friday. The piece quoted Tim Cook high up describing China as a huge opportunity for Apple "over the arc of time."

"But time looks to be on the side of rival Samsung Electronics Co Ltd," the story continued, cleverly using Cook's words against him and noting that Apple's revenue in Greater China fell 43% sequentially last quarter and 14% year over year.

"It's not totally clear why that occurred," Cook said on a conference call with analysts.

The Reuters piece -- written by Melanie Lee and Miyoung Kim from Seoul and Guangzhou, China -- would have you believe that the reason it occurred was as plain as the nose on Tim Cook's face: Samsung.

But data released the same day by IDC and Strategy Analytics tell a different story. It's not just Samsung that's eating Apple's lunch in China, it's LG, ZTE, Lenovo, Alcatel, Huawei and others too small and numerous to name in charts of the world's top smartphone vendors.

Although Samsung continues to lead the world in the number of smartphones shipped -- 72.4 million in the June quarter, according to IDC, more than double Apple's (AAPL) 31.2 million -- Samsung is no longer the growth leader.

LG and ZTE's shipments more than doubled year over year last quarter, albeit from a much smaller base than Samsung's. Others may have grown even faster, according to IDC's press release:

"Several vendors, including Alcatel and Huawei, had high double- and triple-digit growth rates in the second quarter for their Android-based offerings shipped to high-growth countries such as China and India. In 2Q13, these vendors from outside the Top 5 accounted for 44.8% of the overall shipment volume, up from 42.2% in the same quarter one year ago."

"The story is no longer Apple versus Samsung," Forrester's Bryan Wang, told the New York Times. "Going forward, they will both face similar challenges."

See also: AppleInsider: Samsung has not 'dethroned' Apple in profits

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Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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