The Chinese mobile market is a huge deal for manufacturers now – the U.S. is now at a saturation point and China is on track to become the largest market in the world. However, at the moment, Apple is struggling to succeed in this market, coming in at sixth place.

Why? High prices – average incomes in China are now $577/month, which means a $600/$700 phone like the iPhone just isn’t affordable to the average person. The companies beating Apple in China all sell phones far cheaper than the iPhone – for instance China Wireless Technologies is selling more phones than Apple and their Coolpad 8060 costs under $100.

This doesn’t mean Apple is in danger – they are still selling very well in richer markets like the U.S. and Western Europe but they need to look into releasing a cheaper phone for the developing markets. According to recent industry rumors we might see such a device released this year, and that will help sales in China. However there’s a cost to all of this – if Apple starts to compete on price then they might lose their luxurious brand image. Sure they may sell more phones in China but they might make their brand unappealing to the U.S. market, cancelling out any gains.