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China surpasses U.S. to become biggest smartphone market

Rob Schmitz Nov 23, 2011

Steve Chiotakis: New research out today says, for the first time, China has beat out the United States as the world’s largest smartphone market.

But as Marketplace’s Rob Schmitz reports from Shanghai, smartphones in China aren’t quite as… smart.

Rob Schmitz: In the U.S. we have our BlackBerries and our iPhones, but Chinese smartphones are equipped not for email, but for text messages.

Michael Clendenin: People aren’t running around flashing their iPhones around. These are definitely more stripped down models aimed at an audience that’s going to have lower requirements.

That’s analyst Michael Clendenin. He says smartphone makers have figured out the formula for big sales in China.

Clendenin: We called it the sweetspot of affordability.

China’s smartphone shipments grew by 57 percent last quarter, compared to a 7 percent drop in the U.S. market. Clendenin says once the companies got the prices down to around 3 percent of a person’s average monthly income — around $150 U.S. — sales took off. And that’s why big vendors like Nokia and Samsung have offered their lowest-cost models in China — except for Apple, whose iPhone seems to transcend all of this. It’s not officially available yet, but you can buy an iPhone 4S in China for the equivalent of $1400.

In Shanghai, I’m Rob Schmitz for Marketplace.

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