In China, Windows Phone Moving In On iPhone

Mobile phones running on Google‘s Android operating system have “hit their peak”, but Microsoft‘s entrant to the mobile world — the Windows Phone — is moving in on its rivals, ZTE  Corp’s Executive Vice-President he Shiyou told China Daily on Friday.

ZTE Corp is one of the largest phone equipment makers in the world. It launched the Windows Phone this month on its ZTE Orbit device, making Orbit the latest smartphone device to enter the hot Chinese mobile market. The company said it hopes to sell more than 30 million smartphones this year, of which the Windows Phone is expected to account for about 10 percent of that business.

“The market share of Android-based phones has almost hit its peak, while the Windows devices have been gaining momentum since the fourth quarter of last year,” he told the paper, adding the Windows Phone push is part of ZTE’s overall plan to diversify its product portfolio.

With the advent of the Windows Phone operating system to the China market, smaller rivals — namely Apple‘s iPhone — will have a well-heeled competitor breathing down their neck.  Microsoft China’s chief operating officer, Mike Van der Bel, was quoted saying in a recent article on CNET that Windows Phones were already outselling the iPhone.

China is a coveted mobile phone market.

Last year, the country surpassed the U.S. to become the world’s biggest market for smartphones. Strategy Analytics reported in November that 23.9 million units (+58 percent versus the second quarter of 2011) were sold in China in the third quarter 2011 compared to 23.3 million units (-7 percent from Q2 2011) sold in the U.S. for the same quarter.

It is no wonder that Microsoft (MSFT), Google (GOOG) and Apple (AAPL) are all trying to either convince the original equipment manufacturers (OEM) like Nokia (NOK) that there operating system is the one they should be focused on, or — in Apple’s case — inking deals with the wireless telecom companies like China Mobile (CHL).

The Chinese mobile phones market had total revenues of $37.8 billion in 2010, representing a compound annual growth rate (CAGR) of 23.8 percent between 2006 and 2010, according to a March 2012 study by Dublin-based Research & Markets.  Market consumption volumes increased with a CAGR of 25.9 percent between 2006 and 2010, to reach a total of 307.7 million units in 2010. The performance of the market is forecast to decelerate, with an anticipated CAGR of 15.2 percent for the five-year period 2010 – 2015, which is expected to drive the market to a value of $76.5 billion by the end of 2015.

Nokia, Samsung and Motorola are the biggest OEMs in China.  Samsung and Motorola run the best-selling Android operating system (OS) on their devices. Nokia runs their own OS called Symbian.

As of last year, the Android OS had 68.4 percent of the smartphone market, up from 33.6 percent at the end of the fourth quarter 2011, Beijing-based research firm Analysys International said in a report released in April. Nokia’s Symbian OS market share has been cut in half from Google, and is now 18.7 percent. Meanwhile, Apple’s iPhones are more of a phenomenon among the Chinese elite and posted only a modest gain in 2011 with the market share going to 5.7 percent at the end of the year from 4.1 percent in the first quarter of 2011. Apple has said that China, which has 988 million mobile phone subscribers, remains a key growth market for the company.

ZTE’s smartphone sales will more than double this year if it gains market share in Europe, North America, Brazil and Japan, he Shiyou said at the company’s annual analyst day on April 23.

In China, Windows Phone Moving In On iPhone

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