Of the 27% of Chinese phones that cost >$500, 80% are Apples

The most popular category of apps on smartphones costing less than $150 is "wallpaper."

Source: Umeng. Click to enlarge.

FORTUNE -- New evidence suggests that Apple's (AAPL) much-criticized China strategy -- of targeting the high end of the Chinese smartphone market and ignoring the low -- may be working better than overall market-share data suggest.

The evidence comes from Umeng, a Flurry-like app analytics firm that is installed, according to Benedict Evans, on a large share of the smartphone apps in widespread use in China.

Umeng's China Mobile Internet 2013 Overview, issued Wednesday, the market for Google (GOOG) Android phones is strong, representing 57% of the devices sold for less than $350. But the high-end market is also thriving. More than a quarter of Chinese users are carrying smartphones that cost $500 or more, and eight out of 10 of those are iPhones.

Several data points in Umeng's report suggest that 2013 was a year of explosive growth and major changes in China's mobile Internet. Among them:

• By the end of 2013, the number of smart devices in use in China exceeded 700 million.
• Sharing on social networks tripled in the six months between July and December 2013. By the end of the year, more than half of the top 100 apps in China offered social-sharing or social-network-login options.
• Chinese developers in 2013 began taking intellectual property rights more seriously. By year's end, 20% of the top 100 games licensed third-party IP, up from 13% in June
• High-end smartphone users -- mostly carrying iPhones -- tend to favor diverse apps: news, navigation, finance, e-commerce. On low-end smartphones (costing less than $150) the most popular category of apps is "wallpaper."
• Over the course of 2013, the percentage of jailbroken iPhones in China fell from 30% to 13%. Quoth Umeng: "Finally users are becoming aware of the security risks of using a jailbroken phone."