China Beats the U.S., Again

Three months after taking the lead in PC shipments, China has passed the U.S. as the world's top smartphone market.

Shipments to the Sino superpower reached a record 23.9 million in the third quarter, a 58% sequential increase, researcher Strategy Analytics reports. U.S. shipments fell 7% to 23.3 million over the same period. Increasing retail availability plus deals with carriers China Mobile (NYSE: CHL  ) and China Unicom (NYSE: CHU  ) have made it easier for consumers to purchase smart handsets.

Nokia (NYSE: NOK  ) leads the Chinese market with 28.5% of shipments in Q3. Samsung, whose Galaxy lineup has become the face of the Android operating system in many parts of the world, ranked second with a 17.6% slice of the market.

Apple (Nasdaq: AAPL  ) wasn't ranked in Strategy Analytics' press release, but according to The Wall Street Journal, the firm said the iPhone could gain substantial share if China Telecom (NYSE: CHA  ) were to introduce a localized version of the 4S handset that's set sales records here in the United States.

Stateside, HTC leads all handset makers in terms of smartphone shipments with a 24% share of shipments made in Q3. The iPhone ranked second with a 20.6% share. Neither Nokia nor Research In Motion (Nasdaq: RIMM  ) put up U.S. numbers worthy of being mentioned in Strategy Analytics' press release. Shocking.

How does all this play out for the long term? That's tough to say, but right now, Microsoft (Nasdaq: MSFT  ) and Nokia look smart for applying resources to win customers in China. Strategy Analytics' findings may also help explain why many believe Apple's mobile growth opportunity remains largely untapped. (For example, Morgan Stanley says 67% of Asian carriers lack the iPhone.)

Maybe that's the good news in all this. The U.S. may be fading in the fight to be the world's top tech market, but U.S. tech companies have rarely been in better shape.

Who do you think wins the mobile melee in China? Would you buy shares of Nokia, Apple, or neither? Please let us know what you think using the comments box below. You can also add Apple or Nokia to your watchlist for instant updates when mobile news breaks.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Apple at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Apple, Microsoft, and China Mobile. Motley Fool newsletter services have recommended buying shares of Apple, China Mobile, and Microsoft and creating bull call spread positions in Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 25, 2011, at 7:23 PM, deadpsparrow wrote:

    The competition in china will be enourmous. The hype of the Iphone will die and the savings of the Adroid will paramount. I suggest when AAPL misses estimates in January the stock will plunge.

  • Report this Comment On November 25, 2011, at 8:38 PM, TurbulentTime wrote:

    I don't think so. I think Apple will surge again in sometime 2012. My reasons are that Apple just 'cannot' build fast enough Apple store in major cities of China. I am from Hong Kong, one better listen to someone who know well about the Chinese market and other Asian markets, such as Indonesia, Philippines, Vietnam, etc. I have personally visited 10 countries in Asia, and have frequent visits to China from Hong Kong. I work for a VC firm. I know the trend, I know the market, iPhone is HUGE in China, the demand is enormous, and that Apple hasn't been fast enough to match market demands has led to copy-cat of Apple stores. It is a mistake to not take advantage of current Apple shares' slump to start new position of Apple, Inc. (note:) Well, one has to do his or her own research of any stocks before making a buy and/or sell decision. (disclosure:) Personally own 2,340 shares of Apple. My VC firm owns even much more.

  • Report this Comment On November 25, 2011, at 9:00 PM, TurbulentTime wrote:

    Also, a recent poll of Asian economists are actually concerned about not having the infrastructure built fast enough for not just Apple, but also for other American businesses, such as Fedex, UPS since their airports are still in the process of being remodeled or enlarged. There are huge opportunities in Asian countries, not just in China. Thinking about American companies in China tend to make one forget the rest of Asian countries, which populations are enormous as well. And many American companies, including Apple are yet to tap into these countries. My last point is that from consumers' feedback in a major Chinese newspaper poll, 65% of current user of all other cell phone will/desire to migrate to iPhone. This is representative of 65% of current users who are not using iPhone, but other mobile phones. I let the number say the truth. Happy Thanksgiving Everyone!

  • Report this Comment On November 25, 2011, at 9:22 PM, etgh wrote:

    I can't seem to follow this schizophrenic article.

    First we go the China and mention Nokia and go into an Apple dream sequence, but no mention of anyone else. Then we jump to the U.S. and take a swipe at RIM.

    Focus Tim...focus.

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