So you quote a generalized report, lacking any detail at all, from an American company computer and consumer electronic product manufacturing company that makes smartphones as if that were somehow probative of anything at all about a Chinese cell phone service providing company. It isn't. This is your problem. You read into something things that are NOT THERE!
You're assuming the Chinese cellular market model is like the American model where carriers sell the majority of the phones. It isn't. In China, most cellular phones are sold without contracts on the open market by vendors to individuals who then buy their service from a service provider. From what I've read, no phones are sold subsidized in China.
A service provider may or may not sell the majority of the phones on its network... but with the large number of outlets (many multi-story malls in the 300,000 square feet range with hundreds of vendors DEDICATED to just selling cell phones) I can't help but believe that most users buy outside and just find the best carrier deal for their GSM phone by whatever maker they find the best phone price they find. The competition is fierce!
Nope.
I quoted a specific report, which details a specific market share figure for US smartphones as well as specific smartphone sales figures for the US, from one of the most reputable smartphone analysts in the business.
Again, from Canalys:
““The United States smart phone market grew 41% year on year. It is the largest smart phone market in the world by a significant margin, with 14.7 million units accounting for 23% of global shipments in Q2 2010. Android devices collectively represented a 34% share of the US market in the quarter, and with growth of 851% Android became the largest smart phone platform in the country.”
http://www.canalys.com/pr/2010/r2010081.html
It couldn't be clearer. The United States is the # 1 smartphone country on the planet, as far as sales figures are concerned(which is exactly what we are talking about here).
I am assuming nothing of the kind, and more importantly, neither is Canalys. They have been tallying worldwide smartphone market share figures for as long(if not longer) as anyone else. I would suggest they know a heck of a lot more about what they are talking about than you do.
True for general cell phones, and it used to be true for smartphones... Not any more...
From what I've read, no phones are sold subsidized in China.
That used to be true for smartphones, but over the last year or so it's changed. The more expensive phones are now typically sold with a 1 or 2 year contract, with the phone "subsidized" over the months. China Telecom started it with the sales of iPhones (too expensive in China for the average person to buy), and the others now do the same thing for high-end phones only.
The bigger picture is that Apple simply doesn't understand the Chinese market. Sure, you see "iPhones" all over Shanghai, but 90% of them are cosmetic copies, running Windows Mobile or Android. They don't run iOS, and in fact few really want iOS.
Why? It's simple: character input. You NEED a stylus for Chinese character input. Sure, you can do the Mandarin keyboard thing (where you start typing "kuai" - pinyin for fast - and up pops a list of possible characters including 快 which is what you wanted), but that assumes you know pinyin - which a large portion (the majority) of the population do not.
Being able to literally draw on the screen what characters you want, and have the phone interpret that and choose the right corresponding character is critical. WinMo and Android do that VERY WELL. Apple's iOS does a really bad job of it.
And that's why Apple is seeing very little penetration into the Chinese phone market (830 million registered, monthly paid accounts and rising). It's a phone that simply doesn't work for texting or typing (understand that a text message is basically free; you pay for any phone calls. So it's best for your pocketbook if you just text back and forth; this is fundamentally different from the US market where you're charged to text, either per text, or a flat rate for a given number of text messages).
Come over, take a look around - you'll see WinMo used on more "iPhones" than iOS. Simply because it does a fantastic job of character recognition and still is a good smartphone OS as well. Android is picking up steam, too, because it has some great character recognition capabilities, and is free for the phone maker (which they all love).
I can't help but believe that most users buy outside and just find the best carrier deal for their GSM phone
It's a real easy thing to do: you have 3 carriers available: China Mobile, China Telecom, and China Unicom (which, although still its own entity, was bought by China Unicom about 2 years ago). No other options. And if you want an iPhone, you buy from China Telecom, or the Apple store which forces you to sign up with China Telecom.
For the typical Chinese consumer, if they want just a phone for texting, phone calls, appointments, alarm, etc - basic functionality - it's best to head down to the local phone store or market and buy what you want, after haggling over the price.
If, however, you want a higher end smartphone, you still could go to the phone market (except for a real iPhone), but you'll not get a real discount at all over what the carriers offer. So you typically go to the carrier-of-your-choice (usually the one you have now, since phone numbers are NOT portable) and buy what you want with a 1 to 2 year subsidized contract at the same time.