Apple CEO Tim Cook sees China as company's largest future market

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Apple (NASDAQ:AAPL) CEO Tim Cook thinks China will eventually surpass the United States as Apple's largest market. Cook made the comments during a trip to China in which he met with China Mobile Chairman Xi Guohua, once again raising speculation that the world's largest operator by subscribers will soon offer the iPhone.

"China is currently our second largest market. I believe it will become our first. I believe strongly that it will," Cook said during an interview with China's state-run Xinhua news agency.

Apple posted sales in China of $5.7 billion during its most recent quarter, or about 16 percent of the company's total revenue. Still, Apple has some catching up to do in the Chinese smartphone market. The company was No. 6 in China in the third quarter of 2012, with 6.9 percent market share, according to research firm Gartner. Rival Samsung Electronics led the Chinese smartphone market that quarter with 16.7 percent share.

While iPhone 5 sales topped 2 million units during the device's first weekend of availability in China, Apple still does not have a deal with China Mobile, which has more than 700 million subscribers. Cook did not say when he expects China to become Apple's largest market, but he made clear the company sees it as a key part of its long-term strategy.

"We are continuing to invest in retail stores here and will open many more over the next several years," he said. "We have some great sites selected, our manufacturing base is here, and we have incredible partners here. So it's a very, very important country to us."

Meanwhile, there was a kerfuffle caused by an interview Phil Schiller, Apple's senior vice president of worldwide marketing, gave to the Shanghai Evening News. "Originally, many in the Chinese market used feature phones (regular wireless phones). But now a few companies are starting to use cheap smartphones to take the place of feature phones," Schiller was quoted as saying in the report, according to Reuters. "But this is not a direction that we want to be heading in with our products."

But then Reuters withdrew its report, saying that the report was withdrawn because it was "based on a Shanghai Evening News report that was subsequently updated with substantial changes to its content." Reuters did not say what the changes were and the original story still remains, according to AppleInsider.

The issue is notable because just a few days ago both the Wall Street Journal and Bloomberg reported that Apple is working on a cheaper iPhone that it may release this year.

For more:
- see this WSJ article (sub. req.)
- see this separate WSJ article (sub. req.)
- see this CNN Money article
- see this AppleInsider post

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