This Country Loves the iPhone More Than the United States (Hint: Its Not China)

By Markets Fool.com

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Apple should say "arigato" to this country for its iPhone support.Source: Flickr userKarlis Dambrans

Recently, research firm Kantar Worldpanel released its report on smartphone market share for the three-month period ended February 2015. For those unfamiliar with Kantar, the company crunches sales data to determine which operating system is acquiring -- or losing -- market share monthly and then smooths the data over a three-month period to eliminate one-period outliers. For those following the smartphone industry, the data is a good look into the competitive landscape.

The latest news was unambiguously good for Apple's iOS. Led by the newest, larger iterations of the iPhone -- the iPhone 6 and iPhone 6 Plus -- the Apple smartphone continued to pull market share away from other operating systems --most notably Google's Android OS. For example, Applegrew its year-over-year market share across the E5 (Europe's five biggest smartphone markets: Great Britain, Spain, France, Germany, and Italy) by 2.9 percentage points to 20.9%; conversely, Android lost 2.9 percentage points of market share during that period, falling to 67.6%.

Kantar said Apple is doing well in the increasingly important Chinese market. After a long courtship period, Apple secured an agreement with China's (and the world's) largest mobile services provider, China Mobile, early last year, and that partnership is now paying dividends. Its market share in China grew nearly 10 percentage points on a year-over-year basis, to 27.6%. But Apple's most-fervent market is not China, any of the E5 nations, or its home country of the United States -- the country that loves the iPhone the most is the island nation of Japan.

One out of two ain't bad
Edging out the United States, Great Britain, and Australia, which reported iOS market share percentages of 38.8%, 38.6%, and 38.5%, respectively, Japan reported iOS market share of 49.8% in the three months ended in February. Simply put, one of every two phones sold in Japan during December, January, or February were Apple phones --more than 10 percentage points above Great Britain and its former colonies.

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Apple benefits in the Japanese markets as the country has a high degree of technological know-how, a moderately high GDP, and a contingent that flat out loves the product. For perspective, Japan is the 10th-largest country by population, but the country is No. 3 when it comes to the number of citizens who access the Internet. In addition, the country boasts more mobile phone connections than people. All in all, a favorable market for high-end Apple.

Apple shouldn't rest on its laurels, however
That said, Apple is actually on the defensive in Japan. In fact, what's going on there appears directly inverse to Apple's moves in most other countries. That 49.8% market share as of February was down 5.1 percentage points from last year's total of 54.9%. Meanwhile, Google's Android increased its market share on a year-over-year basis by 3.1 percentage points, from 44.8% to 47.9%.

Some of this should be expected due to timing -- the iPhone was first offered on Japan's largest mobile provider, NTT DoCoMo, in late September 2013 and sold well through the next six months. So, in a way, Apple is fighting a tough year-over-year comparison period but still executing well by taking nearly half of all cell phones sold in Japan. But a market share loss is a loss and Apple should continue to watch this vital market. While much is made of Apple's moves in China, investors shouldn't ignore the market in which it has its highest market share: Japan.

The article This Country Loves the iPhone More Than the United States (Hint: Its Not China) originally appeared on Fool.com.

Jamal Carnette owns shares of Apple. The Motley Fool recommends Apple, China Mobile, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.