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China passes US as world's biggest smart device market

China passes US as world's biggest smart device market

Tue 19 Feb 2013 8:57am GMT / 3:57am EST / 12:57am PST
MobileHardware

209 per cent year-on-year growth puts China in an unassailable position

China has overtaken the US as the world's biggest smart device market for the first time.

According to new data from Flurry, China will close out February with 246 million active smart devices - 16 million more than the US. China was still trailing in second as recently as the end of January, but the rate of growth in the country's smart device market carried it past the US, and that gap is likely to widen from here.

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China became the world's fastest growing smart device market in February 2012. It has added 150 million devices since then, at a year-on-year growth rate of 209 per cent. Indeed, China is the only major smart device market among the 12 fastest growing countries for active devices, so it's lead could soon become as intimidating as that held by the US a few years ago.

"China has over 1.3 billion people while the U.S. has just over 310 million. Considering that the U.S. has the world's 3rd largest population, the only other country that could feasibly overtake China sometime in the future is India, with a population of just over 1.2 billion," Flurry's report states.

"However, with only 19 million active smart devices in India, China will not likely see competition from India for many years."

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9 Comments

James Boulton
Tools & Tech Coder

131 168 1.3
The market is certainly large, but the amount of piracy over there is crazy. Given intellectual property theft is entirely legal in China, the amount you can monetise from such a large user base is pretty minimal.

Posted:A year ago

#1

Adam Jordan
Community Management/Moderation

113 65 0.6
To be brutally honest, I can't take China seriously. I understand their culture is way different to western culture but as James mentioned, the amount of piracy over there is crazy and it's not just "I'll download this song or game" it's literally "We see this model of phone is doing well in the US or UK, so we will steal their actual idea and they can't do anything about it because we've shielded ourselves in our own laws"

It reminds me of that kid that when playing something like "Cops and Robbers" where when he is the cop and he shoots at you, he hits first time but when you are the cop "No, no, it didn't...I'm not dead or caught, you're cheating!"

Posted:A year ago

#2

Thomas Dolby
Project Manager / Lead Programmer

331 279 0.8
I'm surprised to see some fairly dramatic declines in the number of active devices in the US at some points in the graph. Were people literally just throwing away smartphones in that time? I would have thought for the majority of people, they would replace their device with something else cheaper or better.

Posted:A year ago

#3

Dave Herod
Senior Programmer

521 749 1.4
@Thomas Dolby - Depends on how they define an "active device"? Maybe people buy iPads, get bored of them and leave them on a shelf collecting dust and then start using them again when some new app comes out or new service.

Posted:A year ago

#4

Brian Lewis
Operations Manager

127 79 0.6
Does anyone know the split of market share for iOS vs Android vs Other for China? This alone could have a major impact on what the end result of this growth results in. The growth of the mobile market is most certainly a major factor in China reconsidering console sales. When it is common to have a mobile device that can perform a similar function as a dedicated game device, it becomes less reasonable to limit their sales.

China may be copying technology, but they are not copying the business models of how they are sold. I would expect to see free to play game to be the core sellers for China, as they are more resilient in this environment, and can adapt to change much quicker.

Posted:A year ago

#5

Anthony Chan
Analyst

88 72 0.8
I agree with Brian. How can developers not see this as an opportunity to explode and grow? From an investment perspective, the above commenters if representative of their companies are not good buys. They do NOT have the open mind to compete globally. Yes, agreed, China had issues with copyright protection. However, maybe the above commenters need to re-evaluate business and monetisation models.

China has beaten its own game by pushing F2P. You can't pirate what is already given away for free. Also, they have proved IAP or IGP is totally a viable model to bring in revenue.

China is the next target market. This is already prevalent for PC. It is continuing to explode for mobile as seen by the above stats. And don't forget, China is revaluating lifting the long-time ban on gaming console sales in China. In a market economy, where China is still showing positive growth in its economy (though less positive growth - though better than an actual recession seen by most of the Western world), where to extract your sales geographically is vital.

Posted:A year ago

#6

James Boulton
Tools & Tech Coder

131 168 1.3
We have very very low IAP sales in China, yet a lot of people playing. So freemium isn't the answer to everything.

To be fair, China have come a long way in IP rights, and are in fact starting to patent a lot of technologies in telecoms and are actively defending their IP rights. It may still be a while before the rampant piracy issue is solved, however.

Also, there are plenty of ways around paying for IAP -- so, yes, you can essentially "pirate what is already given away for free" by never paying for IAP. Unless you make all of your revenue from adverts, of course...

Edited 1 times. Last edit by James Boulton on 19th February 2013 5:33pm

Posted:A year ago

#7

Anthony Chan
Analyst

88 72 0.8
@James - :) you just listed models that would potentially work in that market. Too many developers are asking laws, markets and ideals to be adjusted to fit their development needs - see all the talk in the PS4 walled garden article. However, maybe it should be the other way around. Business schools have always taught companies that can adapt and adjust to changing markets, technologies, and cultures/ideal will always overtake those that do not.

I know many developers here gripe on those with their mind on the money, but at the end of the day, making a game is not just for the love of it. You all hope to make a shiny penny as well. If this means potentially changing to a model that uses adverts (I know.. advert in game = bad), then so be it.

Posted:A year ago

#8

Paul Johnson
Managing Director / Lead code monkey

810 1,015 1.3
They'll just hack off the adverts, especially on Android where it's a doddle.

You cannot get cash out of someone who just doesn't fundamentally understand why he should spend it. Period.

This race of people just doesn't get it and there's no point trying to blame us westerners for not adapting to suit them. They want free stuff? Well, frankly, fuck em. I'm not a charity.

Edited 1 times. Last edit by Paul Johnson on 21st February 2013 11:40pm

Posted:A year ago

#9

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