Apple may find its new core in China

Apple may find its new core in China

Increasing demand in China for Apple Inc's latest flagship devices, the iPhone 6 and iPhone 6 Plus, has spurred consumers there to buy more of the devices than their American counterparts for the first time, data from Switzerland-based financial services company UBS AG showed.

"Recent data suggest that iPhone demand saw considerable growth in China, even finding that China could constitute as much as 35 per cent of shipments in the quarter compared with 22 per cent a year ago," Steven Milunovich, an analyst with UBS, wrote in a research note published on Wednesday.

The US share of iPhone sales is expected to dip from 29 per cent a year ago to 24 per cent in the first quarter of 2015, he wrote.

Milunovich, who covers Apple for UBS, said the iPhone has seen significant gains in the world's second-largest economy since the device was rolled out in October.

Estimates from UBS show that Apple sold 69.3 million iPhones in the fourth quarter of 2014, a new quarterly record for the Cupertino, California-based tech company. The figure beat the consensus estimate of 65.5 million devices.

Apple's distribution agreement with China Mobile Ltd, the world's largest mobile phone operator, could be one of the reasons for the uptick, Milunovich said.

"China Mobile's distribution agreement with Apple was signed in late December 2013 and Apple began shipping the iPhone 6 and 6 Plus in October, so it seems reasonable that demand in China surged relative to other regions," he wrote.

In October, Apple's new iPhone 6 and iPhone 6 Plus arrived in China despite a regulatory delay in the rollout. Heavy interest from Chinese consumers helped Apple sell nearly 10 million units within three days of the initial sell date on JD, the e-commerce platform of JD.com Inc.

At the end of the third quarter of last year, the iPhone held 18.1 per cent of market share in China. In the US, nearly half of all smartphones sold (47.3 per cent) were iPhones, according to international market research firm Kantar Worldpanel.

Apple also posted its largest third-quarter sales volume figure in 2014, according to data from the International Data Corp. The company boosted its global smartphone shipments to more than 39 million units, second worldwide behind Samsung Electronics Co (78 million units).

Samsung, based in Suwon, South Korea, remained the world's largest smartphone vendor in the third quarter of 2014, with 23.7 per cent of the market, followed by Apple with 11.7 per cent.

Other global players, including Chinese companies like Xiaomi Corp and Lenovo Group Ltd have also managed to squeeze into the fray.

Xiaomi and Lenovo were ranked third and fourth on that list, with 5.2 per cent and 5.1 per cent shares, respectively.

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