iPhone China Sales Will Outstrip US: Report

Apple is expected to announce that it sold more iPhones in China than in the US for the first time in history.
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Apple will likely announce a shift among its top iPhone markets during its earnings call on Jan. 27. Industry experts claim that iPhone sales have been higher in China than in the US, marking a historical turning point for the tech giant and the smartphone market.

UBS analysts estimate that during the most recent quarter, China seized 36% of iPhone shipments while the US accounted for 24%. It's a significant change from just one year ago, when the US purchased 29% of iPhones and China purchased 22% during the same time period, according to the Financial Times.

China became the dominant force in the smartphone market back in 2011, when shipments reached 23.9 million units, as reported by CNET. Now it boasts almost 520 million smartphone users. The playing field for smartphone vendors has been rocky in recent months, as Samsung profits have fallen and inexpensive competitor Xiaomi has gained market share. 

China's iPhone sales escalated last year when Apple struck a deal with China Mobile, its largest network operator, which provided the opportunity to reach more than 800 million subscribers. Growth continued to expand after China's October release of the iPhone 6. Apple's Tim Cook predicted in 2013 that China would eventually surpass the US as the largest iPhone market. Now, it seems his prediction is becoming reality.

Ben Bajarin, analyst at Creative Strategies, estimates that China's iPhone sales exceeded those in the US by about 2 million during the most recent quarter. He spoke to even greater potential for iPhone growth in coming months, with customer loyalty fueled by the China launch of Apple's new watch.

"It's already been a good year, building up to the climax of this quarter," Bajarin said in an interview with the Financial Times. "It leads to a lot more optimism for China … Their potential headroom in China is higher than it is here [in the US]."

[Flashback: The first transcontinental phone call was 100 years ago.]

Despite its great potential, Apple is likely to face challenges as it seeks to capture more of the market. Obstacles will come in the form of new competition and conflict with the Chinese government. Before the latest iPhone was released in China, it was subject to a regulatory review process that took almost a month to complete.

While China may be the largest market for Apple, it should be noted that Apple is not the largest smartphone vendor in China. Low-cost products, most of which run Android software, continue to dominate the Chinese market.

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