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iPhone sales in China expected to exceed those in US

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REUTERS/Kim Kyung-Hoon/Files

(Read caption) A man talks on an iPhone in Beijing in this July file photo. Apple is expected to announce that for the first time more iPhones have been sold in China than in the US.

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Apple is expected to release its fourth-quarter earnings report at the end of the day Tuesday, which many analysts predict will show more iPhones were sold in China than in the US.

This marks a surge in interest from one of the hottest mobile markets in the world, and could mean Apple has a shot at a piece of a profitable market filled with affordable local options.

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Research firm UBS predicts that in the most recent quarter China will account for 36 percent of Apple smart phone shipments as compared to 24 percent for the US, the Financial Times reports. Last year at this time, the US accounted for 29 percent of shipments, while China was at 22 percent.

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What sparked the boost in sales? Two things: China Mobile and the phablet-sized iPhone 6 Plus. Last year, Apple inked a deal to sell iPhones through China Mobile, the most popular carrier in China and the biggest wireless company in the world. Selling through this wireless carrier provided access to a new range of customers and pushed the iPhone alongside popular low-cost Xiaomi smart phones and Korean behemoth Samsung.

Though initially predicted to just be popular among luxury customers, given its $1,000 off-contract price (as opposed to $500 or less for a near-identical Xiaomi phone), China’s rapidly expanding middle class has expressed more interest in the American brand.

With the iPhone 6 and 6 Plus, Apple also designed a phone that had a Chinese customer in mind. Last March, market research firm Kantar WorldPanel ComTech found that four out of every 10 smart phones sold in China had a screen size larger than five inches diagonally, indicating a “phablet” sized phone sells well. The iPhone 6 Plus screen size comes in at 5.5 inches, the biggest that Apple has ever debuted. That may have been a nod to Chinese preferences that paid off.

Though this marks a shift for Apple’s customer base, China still remains an Android-dominated country. Android phones have an 86 percent market share in China. Not to mention, Apple has to face extra barriers to entry: despite the deal with China Mobile, Apple had to delay the release of the iPhone 6 set of phones for nearly a month to deal with regulatory agencies.

China is the largest smart phone market in the world with almost 520 million smart phone users. Overall, Apple is expected to have sold 65 million smart phones during the final quarter of 2014, according to research firm Piper Jaffray