China Prefers Cheap Androids, Expensive iPhones

NEW YORK (TheStreet) -- By the end of 2013, China topped the 700 million mark for smartphones and tablets currently in use. Most of those products sold for less than $350 and run on Google's (GOOG) Android operating system.

According to the latest numbers from research firm Umeng, 59% of all new devices were bought by smartphone users upgrading from existing hardware in the fourth-quarter of 2013. The rest were purchased by first-time smartphone users.

The survey found "as smartphone use becomes more commonplace in China new sales are increasingly driven by existing users upgrading rather than from users purchasing their first smartphone".

China, the world's largest smart device market since November 2011, is being driven by lower-priced Android devices. 57% of new purchases were devices selling for less than $330, with the largest segment coming from purchases of $149 or less.

The second largest segment is the $500+ category, accounting for 27% of China's total smart device sales. In that group, Apple (AAPL) iPhones accounted for 80% of the high-end purchases. Unlike most smartphone sales in the United States, Chinese buyers pay the full price for their new devices upfront and not as part of charges built-into a two-year service contract.

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