China becomes world's second-largest iPhone app market

China becomes world's second-largest iPhone app market

But with Chinese users reluctant to purchase apps, who will figure out a way to make the market pay?
Chinese iPhone users will download your app -- if it's free.

Global tech investors have yet another reason to salivate over China. Recent reports by Netherlands-based app consultant and publisher Distimo rated China the world's largest iPhone application download market, after the United States.

The news rings like a dinner bell for international companies and developers keen on tapping into the hot Chinese market.

China's app download volume has grown steadily and rapidly throughout 2011. The reports of Chinese growth come sooner than many insiders anticipated, given that Apple opened its first tailored iTune App Store for China only in October 2010.

According to the statistics shown in iTune Store today, the most downloaded free iPhone app in China is QQ 2011, the iPhone version of China's biggest instant messaging software, released by Tencent.

The most popular paid iPhone app, on the other hand, is the localized Plants vs. Zombies, which has only been released officially for less than a week. Its English version has already been downloaded 40 million times by Chinese users.

A major challenge market developers face in China is that, as in many other Asian countries, local users are far less likely to pay for apps or make in-app purchases than are U.S. users.

In China, only 34 percent of revenue from the 300 top-grossing applications comes from in-app purchases. Total app download revenue in Asia is only about two-thirds of the app download revenue generated in the United States. 

Given this disparity, marketers in Asia are scrambling to find different ways to monetize China's supersized app market, often turning to embedded advertising.

Distimo also reports that localized app content is popular in countries such as China, South Korea and Japan. In China, for example, 65 percent of the 300 most-popular free applications are popular only within confined regions of the country. 

In countries such as India and Indonesia, localization of app content is less important.

Also intriguing to China tech-market watchers are rumors that the iPhone 5 is making its way to China. 

A China Mobile employee allegedly spilled the beans that the popular Chinese carrier will launch Apple’s fifth-generation iPhone in September 2011, Ticonderoga Securities analyst Brian White wrote in a note to investors last week.

Jane Leung is a Hong Kong-born Canadian who has dabbled in the mixed media bag of film and television production, the professional sports industry and magazine publishing. 

Read more about Jane Leung