China Unicom, the only authorized carrier for Apple's iPhone in China announced today that the demand for smart phones in the China market in 2012 is forecast at 200 million units and 44% of which, that is, 88 million units, will be sold at below CNY800 (US $130), meaning big opportunities for China Unicom, the company said. China Unicom announced partnerships with Apple's major competitors among LG Electronics, Nokia, HTC, Motorola Mobility as well as China-based vendors K-Touch and Xiaomi Technology to address this market. Apple's least expensive phone is over $200 on Ebay and China Unicom accounts for about 25% of the market this development limits Apple's current market share to a maximum of 12% or so of the largest smart phone market in China. If Apple would offer an entry level phone at this price point such as an earlier version of the iPhone Apple could gain significant market share in China.
Disclosure: I am long AAPL.