China is largest single Android market, but U.S. is catching up, says analyst

Android is doing incredibly well in China, and Apple is going to need to pull out the stops to keep its market share from eroding further.

Two in every three mobile phones sold in China in 2012 were powered by Google's Android mobile operating system, making it the single largest market for the platform. But the U.S. market is catching up, and doing so rapidly.

These are findings of research carried out by Informa Telecoms & Media. The figures make China the fastest-growing market, with a year-on-year growth of 85 percent over 2012, and with much of this growth being driven by high demand for Android handsets. 

Android is also doing incredibly well in the U.S., which is currently the second-largest market for Android, with an 11 percent share. According to Informa’s research, this will increase to at least one in every two mobile phones sold during 2013.

It is estimated that around 786 million Android smartphone devices were sold worldwide in 2012.

"Despite the economic downturn, the global smartphone market is enjoying healthy growth and consumers are actually spending more to acquire more technologically-advanced devices. It is estimated that around 786 million smartphone devices were sold in 2012 (including the devices powered by non-certified variants of Android that are proliferating in China), which is 45% more than the total number of smartphones sold in 2011," wrote Malik Saadi, principal analyst at Informa Telecoms & Media.

Bear in mind that not all Android handsets sold in China can tap into Google's app and services ecosystem. In fact, according to Saadi, 41 percent are set up to support alternative application frameworks such as Baidu, Alibaba, Xiaomi, and other local channels.

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Other players are scrabbling with single-digit sales shares. The iPhone was in second place with 5 percent, while Microsoft Windows Phone is stuck on 1 percent. Nokia's partnership with China Mobile is expected to be good for Microsoft, and is anticipated to bump its share in 2013 to 2 percent.

Things are not predicted to be so rosy for Apple, with Informa expecting it to lose market share slightly if Apple does not release a TD-LTE variant for the Chinese market. Even in the U.S., Saadi believes the iPhone could "face significant challenges if Apple does not manage to make radical changes to its aging iOS, particularly to the user interface (UI)."

The consequences on not being able to revamp iOS is that Apple could be forced to compromise the high margin associated with its iPhone in order to maintain volume share.

"Looking forward, Android is expected to continue gaining market share globally and, by 2015, one in every two handsets sold worldwide will be powered by it. However, according to Informa Telecoms & Media, the market share of this platform could potentially peak – or even decline – after 2016 owing to a more aggressive penetration of the alternative OSs, most notably Windows Phone," concludes Saadi.