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Apple sets new iPhone sales records in Japan, Korea and China

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January 21, 2015

Apple said this morning that it has set new iPhone sales records in Japan, South Korea and China.

In Japan, Apple won a little over fifty-one percent of all smartphone sales in November. Japan has traditionally been a strong region for Apple, but now it's becoming increasingly difficult for competition to challenge Apple's dominance in near to mid-term.

The growing audience of iPhone users in Japan may also benefit the adoption of the upcoming Apple Watch.

To be sure, as consumers took a liking to big-screened phones, Apple was late to the party compared with its Android rivals.

Acknowledging the demand, Apple finally released its 4.7-inch iPhone 6 and its 5.5-inch iPhone 6 Plus last September in hopes of winning back customers and market share.

That strategy seems to be paying off, not just in the United States and other countries but in South Korea as well, where its main rival Samsung has dominated for so long.

In Samsung's home base, Apple accounted for about 33.7 percent of all smartphones sales in November.

"No other foreign brand has gone beyond the 20 percent market share point in the history of South Korea's smartphone industry," Counterpoint Korean research director Tom Kang said in a statement.

"It has always been dominated by the global smartphone leader, Samsung. But iPhone 6 and 6 Plus have made a difference here, denting the competition's phablet sales. Korea being the world's highest penetrated phablet market (handsets with 5 inches above screens) earnestly needed a large screen iPhone for quite a time and now this thirst has been quenched."

Apple's share of sales in Korea could have been higher had the company's supply been able to reach demand.

"If there was a better supply of iPhone 6 and 6 Plus 64GB & 128GB models during the month, then Apple's share could have climbed to the 40 percent level," Kang noted.

That big a piece of the pie would have truly challenged Samsung's share, which came in at about 45.8 percent over the same period.

In China, iPhone sales grew about 45.2 percent annually in November, triggering a record high in monthly sales volumes. Counterpoint attributed the gain to "rich urban Chinese consumers" attracted to the new iPhone's form factor.

Apple's twelve percent market share in China pushed it into third place behind dominant local players Xiaomi and Lenovo.

"The iPhone 6 was the most popular iPhone model during November accounting for 69.2 percent of the total iPhone sales," Counterpoint research director Neil Shah said.

"But with the improving supply of iPhone 6 Plus, we believe the iPhone 6 Plus sales will contribute to a greater proportion of the sales mix in December and during the Chinese holiday season in Q1 2015."

Apple initially ran into issues launching the new iPhones in China. The iPhone 6 and iPhone 6 Plus went on sale in the United States and other countries on September 19, but China wasn't on the invite list due to a delay in regulatory approval of the new phones.

The country's Ministry of Industry and Information Technology had to approve the new iPhones for network access before retailers could officially start selling them.

That approval finally came through in late September, with sales launching in October 2014.

Globally, Apple's iPhone sales grew by 26.7 percent annually in November 2014 over the same month in 2013.

Sales were boosted not only by the new iPhone 6 handsets but also by the older and less pricey iPhone 5S and 5C, aimed at prepaid customers in emerging markets. By tapping into the increasingly popular big-screened device market, Apple both challenged Samsung and made up for slowing demand for the iPad tablet, according to Counterpoint.

By simply launching the iPhone 6 Plus, Apple killed two birds with one stone-- first, jumping into the fast growing phablet segment and recapturing the share lost to Samsung's popular Note series in the premium smartphone category.

Secondly, by offsetting the lackluster demand for iPads and targeting users looking for a single device and thus in turn recognizing even greater contribution to the top-line and bottom-line from the iPhone 6 Plus than it would have been able to generate from the iPad Mini.

In other mobile news

We've just learned that Apple's latest iOS 8.2 build (only available in beta for now) features support for the Apple iWatch, signaling that the expensive 'wrist puter' might coming sooner than previouly expected.

Of course, the new device requires an iPhone nearby to work, hence the need for the handset's OS to support the smartwatch.

Last month, our sources close to Apple said the company's engineers were fixing software bugs in the iWatch, suggesting the device won't be ready until at least the end of the first quarter of this year.

Other outlets are also claiming the iWatch will go on sale this March, so it's probably all over the map by now.

The latest build of the iOS 8.2 beta – available to app developers under NDA – has references to the Watch in its Bluetooth connectivity panel.

A screenshot of the user interface includes a notification that suggests the iWatch will pair with the iPhone via a standalone iOS app.

Apple is letting third-party developers get to work on building software for the new device. In November, it released a SDK for the iWatch that includes tools to build stand-alone apps for the device as well as notification and mini 'Glance' apps.

In other mobile and device news

Some say that ZTE and Alcatel's OneTouch have a bit in common and they are probably right. ZTE's Grand X Max smartphone is now going to AT&T's prepaid subsidiary, Cricket Wireless, we are told.

Both companies focus on selling affordable mobile devices for the consumer market. And, they concentrate on prepaid customers.

And they're both growing pretty fast if numbers from the last quarter are any proof. And as Chinese companies operating in the United States, they've both flown under the radar, at least so far, anyway.

Now ZTE and Alcatel both want to make more advertising in the U.S. and they made some bold claims at this year's Consumer Electronics Show (CES).

For one thing, they're preparing to spend more on marketing. They're sponsoring more events and arenas. They're increasing the quality of their products and expanding into related fields such as wearable technology.

They're also investing in Silicon Valley in hopes of drumming up developer support. To be sure, their ambitious goals underscore the constantly shifting ground in the competitive U.S. smartphone market.

With Samsung stumbling a bit in 2014, and established brands such as HTC and Motorola scaling back their product lineups, ZTE and Alcatel see an opportunity to establish a more visible beachhead in the U.S.

For consumers, that will mean more choice when it comes to affordable smartphones. Alcatel has a new Watch, which works with both Android and iOS devices.

It can also be said that, with a stronger brand comes increased consumer appeal and, ultimately, higher sales of pricier smartphones.

It's a strategy that companies such as HTC, LG and Samsung followed to household recognition-- slowly build credibility by catering to the wireless carriers' requests, expand distribution, gradually introduce the brand and roll out the marketing.

The higher profile and more profitable products should theoretically follow. Still, given the lack of awareness and the extreme competitive nature of the business, there are significant challenges.

"Most U.S. consumers don't know the Alcatel or ZTE brands, so in addition to product marketing, they'll need to bring compelling brand advertising to create awareness," said Charles Golvin, an analyst at Abelian Research.

Despite similar goals, ZTE and Alcatel are nevertheless in different situations just the same. ZTE has been in the smartphone business longer and is further along in building its name thanks to its sponsorship of a few NBA teams, which includes having its name featured on Madison Square Garden's.

Alcatel, owned by Chinese television giant TCL, is further behind the curve, having just gotten into the smartphone business in 2013.

But the company is promising several things, and on Tuesday parent TCL acquired the rights to the Palm name in the hopes of tapping into the nostalgia factor and raising its profile. But we'll see where that will take them...

In the third quarter of 2014, TCL ranked as the 6th largest maker of smartphones, with a 3.5 percent market share of the global market, according to Gartner. ZTE was the No. 9 player, with 3 percent of the market.

Over the last several years, ZTE has been steadily building a presence in the US through the prepaid market for budget phones.

In other mobile news

Verizon Cloud will be down for maintenance for up to 48 hours next weekend and virtual machines hosted there will be inoperable.

The planned maintenance period is to enable the introduction of unnamed improvements, Verizon said earlier today.

At the time of writing, Verizon's Cloud Client Care page does not mention the maintenance, but users have emitted Tweets in which they express a little incredulity about the need for the temporary shutdown.

We asked Verizon to confirm this planned service outage and the company responded by sending us the following statement:

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“We are conducting regularly scheduled system maintenance on Verizon Cloud next weekend. We’re adding several new features to our platform that will continue to improve the service for our enterprise customers.

Updates of this nature typically require some system downtown and we have notified customers in advance to make sure they can plan accordingly. This is a standard practice in the industry. No customers in Australia will be impacted.

We anticipate the update will take far less than 48 hours. Previous similar updates took about 24 hours or less.”

In a very long thread following the Tweet, a number of users and commentators wonder if it is acceptable to take a cloud down for even a few minutes, never mind at least 24 hours.

Verizon acquired its cloud from Terremark back in 2011 and has since outlined plans to build its own platform based on Xen and CloudStack.

That its system requires 24 hours or more of maintenance is at odds with other cloud vendors' usual approach of effortless upgrade and downtime in tiny doses about letting IT staff innovate.”

And perhaps Verizon's new features will deliver that experience, but for now, the company's delivering an oddity that has its users very unhappy it would seem.

It looks like Vodafone is getting ready to make a deal with T-Mobile USA to get back into the United States market. This has been expected for a while now. The goal is to provide Vodafone’s global customers with an international option, that’s the 400 multinational companies in the U.S. and the 500 companies which are based outside the US but which have a large presence in the country.

To be sure, the U.S. is going to 4G a lot faster than Europe, and Vodafone is touting its good European 4G coverage as a reason why those large customers should have a Vodafone contract in the U.S. that lets them roam on the 16 Vodafone markets which have 4G and the eleven others which don’t yet.

Currently, Vodafone offers 4G roaming in 40 countries. The Vodafone enterprise services include telecommunications expense management, security products, cloud services, M2M services and Vodafone OneNet fixed-mobile converged products.

These give mobile phones landline numbers that can be diverted to colleagues and groups of colleagues. The system is heavily IP based.

The decision to work with T-Mobile is interesting, it has the advantage that customers roaming into the U.S. can use the 3G network but T-Mobile has come under some criticism for its coverage and it’s been well publicised that owner Deutsche Telekom is looking to sell its US division.

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Source: Apple.

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