Samsung, Apple still dominate smartphones, but their shares slip

Vendors mainly from China are offering low-cost, high-quality alternatives, IDC says

Samsung and Apple, in the second quarter, sunk to their lowest shares of the global smartphone market in recent years as Chinese smartphone vendors came on strong, according to market research firm, IDC.

"Samsung and Apple are both seeing a lot of pressure from alternative vendors working their way up the ladder," said IDC analyst Ryan Reith in an interview.

Samsung and Apple still dominate the smartphone market, but are being crowded out by a host of smaller vendors, mostly from China. They include Huawei, Lenovo, Xiaomi, Coolpad, ZTE, TCL and OPPO, Reith said.

In the past few years, Samsung, has taken about 30 per cent of the smartphone market each quarter putting it squarely in first place. In fact, Samsung reached 32.3 per cent in the second quarter of 2013. In the just-finished second quarter, however, Samsung's share dropped to 25.2 per cent, with 74.3 million smartphones shipped, still more than double that of second-place Apple, IDC said. That 25.2 per cent is the lowest share for Samsung since the fourth quarter of 2011, Reith said.

Apple, in second place, has held about 18 per cent of the market each quarter in recent years but lately has seen steady declines, dropping to 11.9 per cent market share in the second quarter of 2014, down from 13 per cent in the same period last year. For the just-passed second quarter, Apple shipped 35.1 million smartphones. Apple's 11.9 per cent market share is its lowest since the first quarter of 2009, Reith said.

"Samsung and Apple still have a lot of volume of shipments, but a lot of other guys are putting out a good device, and at lower cost with quality in many technical areas," Reith said. "There is just more variety in the market and not just in China. In India, there are four local brands, and buyers are more familiar with them than either Apple or Samsung.

"Both Apple and Samsung are still top of the U.S. market, no question," Reith added, but average Americans don't always have a view to the bigger market outside their national boundaries.

Smartphone growth is far higher globally than in the U.S. because of the saturated U.S. smartphone market. IDC said the global smartphone market grew by 23 per cent year-over-year in the second quarter. Meanwhile, the U.S. smartphone market is expected to hover at 11 per cent growth for all of 2014, then drop to the single digits in 2015, Reith said.

Huawei, the No. 3 smartphone vendor for the quarter, nearly doubled its shipments over a year ago, reaching 20.3 million units and a 6.9 per cent share. Huawei was helped by expansion of 4G LTE in China, where national carriers sold subsidized 4G smartphones like Huawei's P7. Adding to its success, Huawei also sold the low-cost Y series smartphone outside of China.

Lenovo, the No. 4 vendor with 5.4 per cent of the market, saw a record second quarter in China, IDC said, mainly with sales of the A788T and the A388T. Total shipments for the quarter were 15.8 million. Lenovo is in the process of acquiring Motorola from Google and will use the acquisition to grow outside of China. A year ago, just 5 per cent of Lenovo's shipments were outside of China, but that share tripled in the second quarter due mainly to sales in Brazil, Russia, India and Indonesia, IDC said.

LG finished fifth for the quarter with a 4.9 per cent market share and shipments of 14.5 million smartphones, such as the L70. The high-quality LG G3 launched at the end of the quarter and is now sold in the U.S. for $US99 on several carriers under contract, and its sales results are expected to affect LG's third quarter.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

See more by Matt Hamblen on Computerworld.com.

Read more about smartphones in Computerworld's Smartphones Topic Center.

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