According to Q3 2012 information from research firm Canalys, Apple is no longer considered one of the top five smartphone vendors in China. The Cupertino-based corporation has now dropped down to sixth place, edged out by a local Chinese company called Yulong.

Why did Apple drop down on the list? There are probably quite a few factors. First of all, more and more Chinese consumers are switching to smartphones for the first time. These first-time buyers are looking for basic devices that have an entry-level price tag, meanwhile the iPhone sells for the U.S. equivalent of $713 without a contract. It also doesn’t help that older iPhone models were incompatible with China’s biggest carrier, China Mobile. Additionally, the iPhone 5 has yet to officially launch in China.

The research from Canalys shows Apple dropped down by about a percent knocking them off the list, but this doesn’t mean Apple is failing in the Chinese market. Apple still controls about 8 percent of the market and could easily bounce back onto the list in the future. That being said, Apple will never rise to the top of any vendor list in China because the company’s prices limit the iPhone’s appeal, as many consumers can’t afford to pay Apple’s premium pricing.

So Apple is now off the list, but who is at the top? Not terribly surprising, Samsung currently leads the way with 14 percent of the market, though Lenovo takes a very close second place with 13%. As for Yulong, ZTE and Huawei? All three of these companies have an even marketshare of around 10 percent each.

One thing this list doesn’t tell us is how well the iPhone 5 is doing versus other premium handsets sold in China. It would be interesting to see how well various luxury handsets like the Galaxy S3 are doing against the iPhone 5 in China. Considering how well the Galaxy S3 is doing globally, I wouldn’t be shocked if Samsung is leading in the Chinese luxury smartphone market as well. What do you think of Apple’s drop down off the list, does it surprise you at all?