Chinese Vendors Trouble Samsung and Apple for Smartphone Market ShareAakash Chandra
We all know that Samsung is losing market internationally as well as in India, now we have exact numbers to believe it. Over the past years, Apple and Samsung slugging it out at the top of the phone and tablet markets. But it seems that the recent boom in Chinese smartphone market has taken a toll on both companies.
IDC (International Data Corporation) estimates that Samsung’s smartphone shipments saw a rare year-over-year drop in the second quarter, taking it from a lofty 32.3 percent market share down to 25.2 percent. This week’s news that Apple suffered a slump in iPad sales would normally be accompanied by news of Samsung taking customers from Apple as it has done in the past. But not this time round.
The cause, analysts say, is the rapid rise of Chinese brands that cuts directly into Samsung’s low-end business. Huawei claimed 6.9 percent of the smartphone space after doubling its shipments, thanks in part to heavy discounts on phones; Lenovo too jumped to 5.4 percent on the back of both budget phones at home as well as rapid expansion abroad.
The worldwide smartphone market grew 23.1% year-over-year in 2014 setting a record of 295.3 million shipments, reported IDC. The market grew 2.6% sequentially due to strong demand and low-cost smartphones. Next quarter is forecasted to be the first to surpass shipments of 300 million smartphone units worldwide.
As the death of the feature phone approaches more rapidly than ever before, it is the Chinese vendors that are ready to usher emerging market consumers into smartphones. The offer of smartphones at a much better value than the top global players but with a stronger build quality and larger scale than local competitors gives these vendors a precarious competitive advantage,
Samsung’s fall is especially troubling given that the measured quarter included the release of the company’s new flagship Galaxy S5. Despite the high-profile launch, Samsung shipped 3 million fewer handsets this year than last year. Chinese brands were the big winners in the second quarter, helped along by the still-significant growth from the domestic market. By far the most impressive was Huawei, nearly doubling its shipments from a year ago, followed by another strong performance from Lenovo.
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