329 Million Smartphones to be Sold in China: Can Apple Get a Piece?

Following a report that China Mobile CHL would sell as many as 120 million TD-SCDMA handsets in 2013, DigiTimes Research has revealed that smartphone sales in China could reach 329 million units by the end of 2013. China's smartphone market grew substantially in 2012, rising 67 percent. That growth is the primary source of Apple's AAPL interest in the market. By getting in on the ground floor, Apple has the chance to sell iPhones to customers who have never owned a smartphone before. It also has the opportunity to take control of a market as it grows, long before Google's GOOG Android or BlackBerry BBRY overwhelms the market with handsets. Android has already made progress in China, however. Between its success and the record-setting iPhone 5, Taiwan-based suppliers fear that it may be too late for China to develop its own mobile OS. Tim Cook, who became Apple's CEO after Steve Jobs stepped down in the summer of 2011, firmly believed that China will become the firm's most important market. He told Xinhua News that China is currently Apple's second-largest market. "I believe it will become our first," he said. "I believe strongly that it will. "We are growing very fast. We are continuing to invest in retail stores here and will open many more over the next several years. We have some great sites selected, our manufacturing base is here, and we have incredible partners here. So it's a very, very important country to us." The demand for iPhones and iPads is so great that it allowed counterfeiters to open more than 20 fake Apple Stores in China. The company fought hard to close them down in 2011, working with local authorities to ensure that only legitimate locations remained operational. That effort seems to have failed. Last October, The Guardian reported that there were still several fake Apple Stores in China. One of them is accompanied by a new and unofficial slogan for the iPhone 5: "Because you have more money than sense." According to CNN, urban Chinese households have an average of $3,000 in disposable income. That's enough for consumers to buy several expensive items. Lucky for Apple, the iPhone is not the only iDevice Chinese shoppers want. Last summer, the iPad proved to be the most successful tablet sold in China. Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis@benzingapro.com. Follow him @LouisBedigianBZ