China overtook the U.S. in the number of Internet users a few years ago. It was just a matter of time before the world's most populous nation because the largest consumer of smartphones.
Needham & Company analyst Charlie Wolf's latest report on the mobile industry shows that smartphone shipments in China soared 164% to 33.1 million in the second quarter. There were only 25 million handsets shipped in the U.S. during the same three months.
Why do you think Baidu (Nasdaq: BIDU ) made a bigger push into mobile with its Baidu Cloud announcement two months ago?
Unfortunately for Baidu, this remains largely a two-horse race. Google's (Nasdaq: GOOG ) Android becomes the runaway leader with 69.5% of the market. That's a result of Android's open-source nature, where even Baidu's smartphone initiatives are based on Android.
However, we can't discount Apple (Nasdaq: AAPL ) and its 17.3% chunk of the market. Apple had less than 10% of the Chinese market a year ago. That's heady growth, and things can get even better for Apple when the iPhone 5 comes out later this year.
See, iPhones aren't currently compatible with the country's largest carrier, but that should change with the iPhone 5 update. China Mobile (NYSE: CHL ) , with twice as many subscribers as the population of the United States, could easily push Apple's share of the market past 20%, if not 25%.
Nokia (NYSE: NOK ) is in third place, but its 11.2% share of the market will continue to shrink over time. Just as the stateside market has become a matter of choosing between Android and iPhone, China's pretty much the same way -- only it's bigger now.
Pay attention, investors.
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