Samsung, Apple to Lose Global Smartphone Market Share

by CXOtoday News Desk    Aug 12, 2014

market sharre

Increased competition from local players in emerging markets like India and China is expected to pose greater challenges for Apple and Samsung, says a new report from Fitch Ratings, adding that both the market leaders are expected to show a steady decline in market shares to newcomers in the next 12-18 months.

According to the report, the worldwide smartphone market share of Apple and Samsung is expected to decline to around 14 percent and 25 percent, respectively, with both companies’ combined smartphone shipment expected to stagnate at around 460 million units in 2014.

Fitch estimates, the global smartphone market will grow by nearly 20 percent to reach 1.2 billion units during the same period.

In 2013, Apple and Samsung shipped about 15 percent and 31 percent of all devices. “In emerging markets, where cost is relatively more important than global brand strength, competitors’ devices retailing at $100-300 can offer most of the key features of more expensive phones from Samsung and Apple,” according to the report.

It also expects India and China to drive growth in smartphones, accounting for more than 60 percent in shipments in 2015. Local handset makers, including China’s Xiaomi, Lenovo and Huawei, and India’s Micromax, are expected to be the key competitors for Apple and Samsung from these two countries.

Another recent report by IDC also suggests, Apple and Samsung witnessed a dip in their smartphone market share by 1.1 percentage points and 7.1 percentage points, respectively in the second quarter of 2014, to local Chinese vendors such as Xiaomi, Lenovo and Huawei and India’s Micromax.

For example, Xiaomi Overtakes Samsung in China for First Time to take the top spot in the second quarter with a 14 percent share of the Chinese smartphone market, compared to the latter’s 12 percent, which was down 6.3 percentage points from the same period last year. Similarly in India, Micromax also became the country’s leading mobile-phone vendor for the first time with a 16.6 percent share of the market, overtaking Samsung, which stood second with 14.4 percent, according to Counterpoint Research.

The Fitch report said, while Apple’s next iPhone, likely with a larger screen, to be launched in September 2014, is expected to be incremental and not revolutionary. “The profitability of smartphones in developed markets is declining as “market saturation and the lower incremental benefits of new models has lengthened the replacement cycle and slowed growth.”

“We believe that the innovations - which include curved screens and compatible wearable devices - are unlikely to change the trend facing Samsung and Apple,” the agency noted while stating that these global giants need to do something revolutionary in terms of device strategy and marketing to regain customer confidence.