Competition in China is stiff and cheap iPhone,

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SHANGHAI--in China's booming market, which is the United States as world's largest overtake set in this year, a large number of little-known local companies are primed with cheap mobile phones, market share of us giant Apple Inc. iPhone to squeeze.

In the current local challenge to the iPhone, Xiaomi starts the successor to its popular MiOne Smartphone, the top end specifications above those of the iPhone 4S--um is likely to have about half of the price of technology on Thursday.

While iPhone sales in China will rise, Apple's market share can stagnate or money that grows the iPhone in just a few affluent Chinese cities, said even diving as the market-changing demographics analyst.

"The sweet spot of affordability in China 800-1,500 Yuan ($ 130$ 240)," said Michael Clendenin, managing director of Shanghai-based consulting firm RedTech advisors. "The ' Lao Bai XING', or man in the street will go for this mid tier phones."

Industry researcher IDC estimates that in China last year smartphones cost less than $200 40 percent of shipments, while $700 cost devices and more 11 percent of the market accounted for.

Apple released a single iPhone model a year at a price - about $800 - equivalent to about two months figures for urban Chinese, half of the Chinese population 1.30 billion make up. Analysts say that the real growth is in China in cheaper smartphones, where a large number of models at different prices to first-time buyers appeal.

"Apple is not China rule, only because the limited models that they have and the price points they addressed", said an analyst at IDC. TZ WONG, "On the basis of these two factors, we think Apple and the number 1 which will be Smartphone in China."

Apple in the January-March Smartphone shipments in China with 17.3 percent market share, trailing Samsung Electronics 19.2 percent, according to market research firm Gartner on the second place.

Smartphones from Xiaomi--founded only two years ago, but has more value than BlackBerry manufacturer research in motion, to private market valuations-proved so popular, that in minutes after going on sale online sold out. The company, founded by CEO Lei Jun, has last month, that its first half-year was sales close to $1 billion, as it sold more than 3 million mobile phones.

Mirroring Apple's annual Worldwide Developers Conference (WWDC), rise where supporters would pay to Steve Jobs listen new products presented, the informal clad Lei MiOne fans goes 199 Yuan ($31.30) on the introduction of Beijing, the proceeds to charity.

Apple's market share by volume has been on a downward trend and the share of the market commanded by his mobile iOS expected operating system is, slip to third place by 2016 from the second this year according to Gartner analyst Sandy Shen--under Android from Google Inc. and Microsoft Corp. Windows.

Apple's iPhone sales in China, the second-largest market, stumbled across storage regulations with the launch of the iPhone 4s in April-June. This additional inventory meant resellers needed to buy not so many iPhones during the quarter and the expected launch later probably held back this year of iPhone 5, with features for advanced Chinese orders.

"Apple's market share is quite stable." It will be flat over the next five years. "Although volume-wise it grows, that is because the overall market is growing", said Shen.

Research firms IDC and Gartner predictions, China's Smartphone shipments 140 million this year meet were topping out in the United States.

Growth is largely by Smartphone, powered by ZTE Corp., Lenovo Group and smaller private companies like Xiaomi, Gionee and Meizu technology.

Meizu cell phones, to sell, for 1,500 yuan in China and Hong Kong are celebrated by Western technology blogs for the supply of high-end smart phones at bargain prices.

Alibaba group, Shanda Interactive and Baidu Inc have launched all smartphones offer of even cheaper models, this year in the life for under 1,000 yuan. Baidu phone, made with retail partners on 899 Yuan ($140), while waterproof Alibaba Smartphone, with Haier Electronics Group, cost 999 Yuan.

"For those with a iPhone or Samsung... it's only a replacement cycle." "But for many people who do not have their first Smartphone, the people are that get" cheap smartphones, said Shen.

Copyright 2011 Thomson Reuters.