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China is on track to surpass 1bn mobile connections in Q1 of 2012, with market penetration currently estimated at 72%.

The latest data from Wireless Intelligence shows that China ended 2011 on 973.7m connections, an increase of around 16% year-on-year.

The growth has largely been driven by 3G connections, which surpassed 200m in Q4 and accounted for 22% of the total by year-end.

In 2011 3G accounted for 80% of new connections in China, an estimated 26.8m out of a total of 34.2m.

There are three different 3G providers in China – China Mobile, Unicom and China Telecom - each running a slightly different version of the mobile service.

China Mobile dominates the industry with an estimated 648.7m connections, equivalent to a 67% market share.

The choice of handsets is also growing – Unicom has been the exclusive provider of iPhone since 2009, though China Telecom is said to be close to launching a version of the handset.

China Mobile hasn’t officially launched the device, but it is thought to have millions of GSM-enabled iPhones running on its 2G network.

Last year Apple said that China was its second-most important market after the US, accounting for 16% of its total revenue in Q4 2011, so it is likely that official deals will be in the works.

Both Unicom and China Mobile have their own Android handsets that tie-in to their own app stores.

Unicom said that it planned to ship 90m low-cost smartphones this year and a further 60m high-end devices.

This, combined with a booming market in terms of internet use (the number of web users in China is greater than the total population of the EU), a better understanding of the Chinese market is a must for digitally-savvy brands with global growth in their sights.

Plus, since the population of China is around 1.3bn and there are 10m new internet users per month - there's still plenty of room for growth.

David Moth

Published 20 January, 2012 by David Moth @ Econsultancy

David Moth is Editor and Head of Social at Econsultancy. You can follow him on Twitter or connect via Google+ and LinkedIn

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