New research from China mobile analytics firm Umeng (often described as "the Flurry of China”) shows that smartphone adoption in China is growing dramatically, driven mainly by device upgrades, and that Samsung is dominating the fragmented Android market.

Umeng has collected data from 180,000 apps running on active devices throughout China, and acquired by local e-commerce giant Alibaba at the end of last year. It arguably has the best analysis of app use in China, as its code is embedded in a very large share of apps in use in the country, and hence it also has extremely valuable data on smartphone usage.

In its 'China Mobile Internet 2013 Overview' report, published yesterday, the firm found that at the end of Q4 last year there are now over 700 million active smart devices (smartphones and tablets) in China – almost double the reported 380 million in Q1 of that year.

In the 4th quarter, 59 per cent of new devices were upgrades, with the remaining 41 per cent bought by users purchasing their first smartphone. The trend for new sales though is through upgrades, rather than new customers, as smartphone use becomes more commonplace.

High-end smartphones (over $500) have a significant market share in China, contributing 27 per cent of total devices – and a staggering 80 per cent of these are iPhones. The market for budget Android phones is strong, accounting for 57 per cent of devices at the $330 or under price range.

In the 4th quarter of 2013, South Korea's Samsung and local Chinese firm Xiaomi proved to be the most popular Android brands as between them they manufacture all of the top 10 active Android devices – no other vendor comes close. However, the Android market is still fragmented with hundreds of different handsets on the market.

The top five active Android devices in Q4 last year were the Samsung Galaxy SIII with 2.7 per cent, the Samsung Galaxy Note II with 2.7 per cent, the Samsung Galaxy SIV with 1.8 per cent, the Xiaomi 2S with 1.8 per cent, and the older Samsung Galaxy SII with 1.7 per cent – almost a clean sweep for the Korean vendor.

In total though, Samsung had 24 per cent of the active Android market in China in the final quarter of the year. Following a long distance behind were Lenovo and Huawei, each with 8 per cent, and Xiaomi with 7 per cent. However, to reinforce the highly fragmented nature of the Android sector, the leading 'brand' in the top ten list was 'other' at 30 per cent...

This conflicts slightly with data from Kantar Worldpanel, which claims that in December Xiaomi overtook both Apple and Samsung to become the top selling smartphone in China. TelecomTV wrote earlier this week about the attempts being made by local OEMs to expand their markets globally.

The five fastest growing mobile apps categories (excluding games) in China are news, health & fitness, social networking, business, and navigation. But it's social integration that is driving new app development – 55 per cent of the top 1,000 apps provide links to Chinese social networking services, such as Wechat and Renren. Umeng has determined that the amount of daily app content sharing to social networks from smart devices has tripled in the last 6 months.

Despite the number of active smart devices being 700 million, there are believed to be over 1.2 billion mobile subscriptions in China (including feature phones). Umeng hasn't made predictions about the size of the smart device market this time next year, but given the growth patterns of 2013, don't be surprised if the total approaches the 1 billion mark.

http://www.umeng.com/umengdata_reports