Mobile Internet Users in China are 75% of Total

At the end of December 2012, there were about 564 million Internet users in China. There were about  420 million mobile Internet users, representing about 74.5 percent of all Internet users, according to the China Internet Development report.

If you want to know why, sooner or later, Apple will have to create a lower-cost iPhone, that's the reason. Right now, three quarters of Internet users in China use mobile. And, right, now, most of those users own an Android device. 

It isn't any more complicated than that. Apple has done quite well, globally, in dominating the high end portion of the smart phone market. 

But to put it colloquially, Apple now is running out of high end customers. Most of the rest of the market will be more mainstream. So unless Apple wants to settle for low growth, it has to extend its product line, as it has with MP3 players and tablets, to reach a more mainstream user who does not want to buy, or cannot afford to buy, Apple's top of the line device.