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Will Apple's Share of the Smartphone Market in China Continue to Shrink?

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GooPhone threatens to sue Apple over the iPhone 5 design.

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MINYANVILLE ORIGINAL Despite earlier worries of a supply strain on the iPhone 5, Apple (NASDAQ:AAPL) has scheduled an aggressive rollout plan for its new smartphone. After officially revealing the smartphone yesterday, individuals will be able to preorder the phone in the US tomorrow,, September 14 beginning at 12 a.m. Then next week on September 21, the device will be sold in nine markets, which include the US, Canada, the UK, Japan, and Hong Kong. Seven days after that, the phone will be available in 22 more countries.

The rollout plan surprised some analysts, and Apple's goal should allay fears that Apple will be unable to meet the demand for the phone. Some relief also came from Sharp (PINK:SHCAY), which announced that it has begun mass-producing liquid crystal display panels for the iPhone 5 this week. The Wall Street Journal reported earlier that the production of the display panels had been delayed.

Analysts are optimistic about the new smartphone. According to Bloomberg, analysts such as Carl Hower of Yankee Group believe it will be "the best-selling consumer electronics device of all time, bar none." However, the initial reaction to the new phone in China has been mixed.

According to Xinhuanet, 48.1% of 36,000 respondents from a survey conducted by Sina, a major Web portal in China, said they would not buy the iPhone 5. Only 27.3% of respondents said they would buy the smartphone. The remaining quarter said they would "wait and see."

The Wall Street Journal reported that Apple's lead as the top seller of high-priced mobile phones in the Chinese smartphone market has begun to slip with release of smartphones by Samsung (PINK:SSNLF) and HTC (TPE:2498). According to the research group Analysys International, the iPhone accounted for 38% of second-quarter Chinese sales of smartphones that cost more than 3,000 yuan, or $474, this year compared to 44% in the prior-year quarter. Apple sold 2.3 million units last quarter. Comparatively, smartphones with Google's (NASDAQ:GOOG) Android took 59% of the market share last quarter versus 41% in the prior-year quarter. Android makers sold 3.5 million units last quarter.

The iPhone 4S was a hit in China, but Apple has lost some of its luster in the eyes of Chinese customers. Disappointment occurred among some from the lack of any major design changes to the smartphone. A Sina Tech news commentator wrote, "The innovation plight has ended the iPhone 5 mythology." He also commented that Apple's aura is now fading. Wang Yong, secretary general of Brand China Industry Union, said Apple is famous for its "arrogance." He also said that Apple "has failed to meet the demand of the country's customers in both affection and services."

Could the iPhone 5 Get Blocked in China?

Apple may face another challenge in Asia from the Chinese knockoff phone company Goophone, which makes the Goophone I5. The company produced and claims it patented the the design of the Goophone I5 before the official launch of the iPhone 5 yesterday, and it had stated that it would attempt to block Apple's new smartphone from entering the Chinese market if the phones looked identical.

Goophone produced a copy of the iPhone 5 design before its launch by imitating the design of the leaked photos posted on the Web of the phone.

Here is Goophone's website and line of iPhone-like smartphones. The only noticeable difference between the Goophone I5 and the iPhone 5 is that it still has a 3.5-nch screen versus the iPhone's 4-inch screen.

(See also: Critic: With iPhone 5 Launch, Tim Cook Blows Major PR Opportunity.)

Twitter: @ChrisWitrak
No positions in stocks mentioned.
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