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Apple takes fifth spot in Chinese smartphone market

In the world's largest smartphone market -- China -- Apple's share rose in the first quarter of 2013 to make the company the fifth largest vendor. Numbers from research firm Canalys show that the release of the iPhone 5 and price cuts on older iPhone models drove growth of Apple's sales.

Apple's share of the huge smartphone market pie is important to its bottom line -- while 27 million smartphones were shipped in the US during the first quarter, the number in China was a huge 82 million. That share is just 8 percent, well behind Samsung's 20 percent share, but is made up of much more expensive phones.

Phones shipped by number two through four vendors Yulong Computer Telecommunication Scientific, Huawei and Lenovo are usually low-cost models ranging in price from just 400 yuan to 700 yuan (US$64 to $114). Canalys analyst Nicole Peng noted that China Mobile, the largest carrier in the country with 726 million subscribers, has helped drive the large sales volume by heavy promotion of new phones that work on its 3G network.

Peng says that Apple will need to release a less expensive version of the iPhone to grab more market share in China. The iPhone 5 starts at 5,288 yuan ($863) and an 8 GB iPhone 4 goes for 3,088 yuan ($504). Peng notes that a 2000 yuan ($323) model would appeal to customers who want an Apple product, but just can't afford the higher price tag.

China's smartphone shipments rose 156 percent year over year in the first quarter, making the country a key market for Apple and other smartphone manufacturers.

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