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Apple to Tap into Explosive 4G Smartphone Growth in China

10. News
During Apple's Q1 Financial Conference Call yesterday afternoon Apple's CEO Tim Cook noted that iPhone sales had doubled year-over-year in mainland China. Yet the bigger news was yet to come. Cook noted that iPhone activations so far in the past week since the China Mobile launch had been the highest ever in the country. He further noted that the iPhone only launched in 16 cities and that they should see the iPhone in more than 300 cities by the end of the year as China Mobile continues to upgrade to 4G. Supporting Cook's enthusiasm for dynamic growth for iPhone sales in China is a new study published today that states that 4G sales in China are going to experience an explosive 1500% uptick in 2014.


According to a new HIS Technology report published today, China's domestic market for 4G smartphones is poised for a massive liftoff this year as shipments grow sixteen fold from 2013 levels.


Shipments in 2014 of 4G smartphones within China are forecast to reach 72.4 million units, up nearly 1,500 percent from just 4.6 million last year, with the market expected to take off after the second half. It will be the first big year for 4G smartphones in only its second year in the country, up from a practically nonexistent base two years ago.


For the next few years the 4G smartphone market in China will see unstoppable growth, doubling in shipments next year to 144.1 million units, rising another 53 percent to 219.8 million, and then ending 2017 at 298.5 million units, as shown in the attached figure.


2. China domestic 4G smartphone forecast - IHS chart January

Kevin Wang, director for China research at IHS stated in the report that "With support from the government and increasing clamor from the public, 4G smartphones will be the new hot market in China. Already Beijing has granted licenses for TD-LTE, China's homegrown version of the 4G Long Term Evolution standard, to the state's three carriers. This way, China Mobile, China Telecom and China Unicom can all launch commercial 4G services whenever they wish."


For the first half this year, 4G smartphones predicted to be popular in China include Apple's iPhone 5s and Samsung's Note 3. At the beginning of the year, Apple notched a huge triumph by starting to sell iPhones under China Mobile, following a long period of negotiations.


The report points to Samsung's Note 3, a smartphone which sports a larger display as being popular in China. We could see Apple challenging Samsung's Note 3 head-on later this year if the rumors of an iPhone with a larger display actually pan out. That along with a possible new iPhone design rumored for the iPhone 6 in Q4 will make for a very interesting year ahead, especially in China.


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