Samsung selling 3 times more than Apple

Apple Inc has a second partner in China to sell the iPhone in the world's biggest mobile-phone market. The deal may be too late to catch Samsung Electronics Co, with a market share that's three times larger and growing.

China Telecom Corp joined China Unicom (Hong Kong) Ltd in selling the iPhone this month as Apple tries to build on its 7.5 percent share of the country's smartphone sales. Samsung controls 24.3 percent of the market for phones that can play videos and games, according to Gartner Inc, using a strategy of allying with all three of the nation's third-generation networks since such services started in 2009.

Succeeding in China is important for Apple as shipments of smartphones in the country are projected to jump 52 percent this year to 137 million units, overtaking the United States for the first time as the world's biggest market.

Unlike Samsung's strategy of partnering with all carriers, Apple has limited its own success by not making a device compatible with the nation's biggest operator, China Mobile Ltd.

"I don't expect Apple to replace Samsung any time soon," Gartner analyst Sandy Shen said in an interview. "China Telecom is the nation's smallest carrier, so the extent to which they can help Apple is quite limited."

The 16.8 percentage-point gap in China between Apple, based in Cupertino, California, and Samsung almost doubled from the third quarter. While Samsung is No 1 and Apple No 5 in China, the global story is different: Worldwide, Apple passed its competitor, based in Suwon, South Korea, to become the biggest smartphone vendor in the fourth quarter, according to Gartner.

Apple's partnerships with China's second- and third-largest carriers give it access to about 34 percent of the nation's 988 million mobile users, while Samsung targeted the whole market. iPhones aren't sold to China Mobile's 655 million subscribers, a number almost equal to the combined population of the US, Brazil and Mexico.

"Having access to more subscribers gives vendors like Samsung an advantage," said Teck Zhung Wong, a Beijing-based analyst with IDC China, who forecast the 52 percent jump in smartphone sales this year. "If Apple is going to continue to grow in the Chinese market, it has to consider very seriously a handset with China Mobile."

China Telecom had a total of 129.3 million wireless users at the end of January, including 38.7 million 3G subscribers.

Apple introduced the iPhone in 2007 in the US exclusively with AT&T Inc and added a second carrier partner last year in Verizon Communications Inc.

Apple chose not to make a phone with China Mobile because the operator had a unique 3G standard called TD-SCDMA, even after the Chinese company's Chairman Wang Jianzhou met with the then Chief Executive Officer Steve Jobs in early 2010. Wang told the company's annual meeting in May that he didn't expect Apple to introduce an iPhone until the carrier rolled out the fourth- generation TD-LTE network by the end of this year.

China Unicom was the nation's first carrier to offer the iPhone with a service contract in October 2009.

Even though Apple trails Samsung, Nokia Oyj, Huawei Technologies Co and ZTE Corp in China's smartphone market, people still crave an iPhone.

Apple's oldest store in China was pelted with eggs from a crowd of customers on Jan 13 when the shop, in Beijing's Sanlitun district, failed to open on the first day of sales for the iPhone 4S. After police sealed off the area to remove more than 500 people, Apple said it would suspend sales of iPhones at all its stores.

The maker of iMac computers and iPad tablets underestimated the "staggering" demand for the iPhone 4S when it started sales in China in January, Chief Executive Officer Tim Cook said. "We thought we were betting bold," Cook said on Jan 24. "We didn't bet high enough."

The iPhone 4S has been "an incredible hit" with customers around the world, Apple spokeswoman Carolyn Wu said in an e-mail. Apple "can't wait to get it into the hands of even more customers in China", Wu said, declining to comment further on the company's handset strategy in China.