Cartoon Critters Flee Apple for Samsung

Photographer: Tomohiro Ohsumi/Bloomberg

Apple Inc.’s share of China’s smartphone shipments was cut by almost half in the June quarter to 5 percent as Samsung Electronics Co. holds the top spot with 18 percent, researcher Canalys said Aug. 9. Close

Apple Inc.’s share of China’s smartphone shipments was cut by almost half in the June... Read More

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Photographer: Tomohiro Ohsumi/Bloomberg

Apple Inc.’s share of China’s smartphone shipments was cut by almost half in the June quarter to 5 percent as Samsung Electronics Co. holds the top spot with 18 percent, researcher Canalys said Aug. 9.

Hans Han built a $5 million business in Shanghai by slapping big-eyed cartoon animals on the back of Apple's iPhone and iPad. Now he's looking for a new home for the cute critters on his Funway protective cases for mobile devices.

The erosion of Apple's share of China's market for both smartphones and tablets already sent Han's pink owls, green frogs and white cats scurrying to the back of Samsung devices, and he says he's looking to make cases for other handset makers.

"The market changes very quickly," Han, CEO of Shanghai Stella Industry, said in an interview in Beijing. "If you don't change you will die."

The change has come quickly. Apple's share of China's smartphone shipments was cut by almost half in the second quarter to 5 percent, researcher Canalys said Aug. 9. The iPad accounted for 28 percent of tablet shipments in China during the period, down from 49 percent a year earlier, researcher IDC announced Aug. 21.

Companies such as Samsung Electronics and Lenovo Group are winning share from Apple in smartphones and tablets by offering consumers a greater range of choices. But for makers of accessories like protective cases, that's causing headaches.

Apple’s decline means both rising costs to design products for new devices, and lower prices on accessories for cheaper handsets, said Vincent Kwok, chief executive officer of Guangzhou-based Magic Kingdom, a maker of protective cases for iPhones and iPads, featuring Pop Mart-licensed characters such as Pop Panda and Chicky Babe.

Photographer: Nelson Ching/Bloomberg

Cases for smartphones are displayed at the Macworld Asia Conference in Beijing. Close

Cases for smartphones are displayed at the Macworld Asia Conference in Beijing.

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Photographer: Nelson Ching/Bloomberg

Cases for smartphones are displayed at the Macworld Asia Conference in Beijing.

Kwok, who needed only one or two basic case designs for the iPhone, now must make 15 for Samsung models, he said. Plastic moldings for new products cost 15,000 to 20,000 yuan each. Meanwhile, the cases for cheaper devices may sell at only one third the price, he said.

Still, for manufacturers like Han and Kwok, there's little choice as Apple loses ground.

"Expanding our product line has reduced the risk for us," Kwok said. "To focus on Apple is too dangerous."

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

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