Apple's sales in the Chinese market have fallen, according to their financial report for their third quarter of this fiscal year. This drop can be attributed to increased competition as well as anticipation for the iPhone 5.

Apple’s next major market is mainland China; with over a billion potential customers, the mobile giant has acknowledged that China is a major portion of its overall revenue. Thus, the news that Apple’s revenues in that market have slipped is troubling news indeed.

In the third quarter of this fiscal year, Apple’s sales have revealed a considerable drop when compared to the previous two quarters, with a significant portion of the decline coming in its iPhone sales. The revenue for the third quarter in Greater China came to $5.7 billion, a total of 16% of the company’s global revenues. Even though revenues were up 48% from the same quarter last year, it had fallen 27% from the previous quarter.

With increased competition from Samsung and domestic Chinese smartphone brands in the Chinese market, the iPhone’s momentum has been slowing in the past few months according to Li Yi, the secretary of China Mobile Internet Industry Alliance. Apple sold 26 million iPhones in the last quarter, down 26% from last quarter. These sales figures were well below what was expected by the Wall Street analysts.

Apple also released its expected financial report for the fourth quarter of this year; the report is poorer that the previous quarter’s, leading to the Wall Street Journal to describe the company’s performance as a disaster. The expected revenues may imply that the iPhone 5, forecasted to account for 50% of the company’s total revenues, will be launched as early as October. Looking to previous launches, and considering that Apple’s fiscal year starts in October, this seems like a very reasonable estimate.