China is the largest smartphones manufacturer in the world. Its domestic demand for smartphoness is surging as traditional mobiles users switch to more advanced handsets. But most of the new demand is not for the latest gadgets from or .

Apple's loss is Chinese brands' gain. Instead of an iphoness, many choose cheaper home-grown smartphoness when they upgrade from feature phoness.

"'s price is good for average consumers. I can accept the price. The quality is not bad either. Web streaming is very fast. Thats why I'm getting one."said a consumer.

Lower prices, more geared to local needs. Millions of consumers like Mr Liu have the same idea. That's why Apple's share of China's smartphones market was halved in the second quarter--and the US tech giant is trying to catch up.

"Premium smartphoness has less than 20 percent of the market share. The majority of demand in China come from mid-tier and low end smartphoness. Apple sees this dynamic as its older discounted-ones gains popularity here. They are already cooperating with Chinese carriers to come up with a cheaper model of iphoness."said Jane Zhang, tech consumer analyst of Gartner INC.

By 2015, four out of every five cell phoness sold will be smartphoness in China, almost double the number right now. According to iRESEARCH, more than half of the smartphoness sold will be less than 1000 RMB or around 150 USD. China's no.6 smartphones maker -- Xiaomi, just launched a phones priced at under 800 yuan.

"Low end smart phoness account for a third of the entire smartphones market share. It will be around 100 million by the end of this year, and that number will double by 2016. This demand comes from 3rd and 4th tier cities as they upgrade their feature phones to low-cost smartphoness."said Will Tao, consulting director of iResearch Consulting Group.

A key growth driver -- is rural spending on technology, thanks to higher incomes. Gartner forecasts the technology market in rural China will be worth 135 billion dollars by 2022, similar size to the urban market today. Analyst say tech firms must adapt their product mix to suit rural consumers.