Apple, Samsung shed smartphone share in Q2 as market continues to explode

Posted:
in iPhone edited August 2014
Global smartphone shipments increased by nearly 25 percent year-over-year, new data released Tuesday indicates, with Chinese vendors accounting for the lion's share of the growth at the expense of established heavyweights Apple and Samsung.




Despite moving some 35 million iPhone units in the second quarter, Apple's slice of the smartphone market shrunk from 13 percent one year ago to 11.9 percent in the most recent period, according to market research firm IDC. Rival Samsung found itself in an even worse position, dropping more than 7 percentage points year-over-year to finish with 25.2 percent of the market.

Apple's sales are thought to have been restrained somewhat by consumers who elected to wait for the next-generation iPhone before purchasing -- a sentiment echoed by Apple chief Tim Cook on the company's most recent earnings call.

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 some 3 million fewer handsets this year than in the year-ago period.

Chinese brands were the big winners in the second quarter, helped along by the still-significant growth from the domestic market. Huawei grew shipments by some 95.1 percent, while Lenovo posted a 38.7 percent increase.

"As the death of the feature phone approaches more rapidly than before, it is the Chinese vendors that are ready to usher emerging market consumers into smartphones," IDC research manager Melissa Chau said in a release. "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."

It should be noted that IDC's methodologies have been called into question in recent months, as the firm's predictions often differ significantly from reported numbers.
«1

Comments

  • Reply 1 of 40
    sockrolidsockrolid Posts: 2,789member

    Originally Posted by sog35 View Post

     

    SAMDUNG is in huge trouble.

     

    Their top end Galaxy S5 is selling worse than the S4.

    Their flagship S5 was outsold by Apples 5C.

    Their total phones are down 4%

     

    We are nearing the point where all Android phones will be commoditized.  There will be no reason to buy a copycat $700 Samdung when you can buy a copycat $200 Chinese phone that is just as good.  I'd argue that some of the Xiaomi phones look better than Samdung at half the price.

     

    I predict in 12-18 months (basically by next holiday season) the premium Android market ($600+) will be basically on life support.  With nothing differentiating the high end Android phones to the Chinese stuff the market won't be willing to pay double or triple the price.

     

    The Android phone market will basically be the WindowsPC market.  The vast majority will buy the cheap crap with a very few opting for the top of the line.  If they want top of the line they will go to Apple.


     

    Will be interesting to see what happens in the next year.  

    Android phones / tablets might become the "new netbooks."

    Faddish, but catering to only the low end of the market where there is zero brand loyalty.

     

    The rise of the Chinese middle class is increasing the average Chinese citizen's purchasing power.

    And that Chinese middle class is also extremely status-conscious.

    They're contributing to the extinction of African elephants.  They just love ivory.

    And they'd probably prefer domestic brands or Apple over Samsung.

    Will be interesting to see what happens in the next decade or two.

  • Reply 2 of 40
    ddawson100ddawson100 Posts: 513member

    The pie is growing and just looking at unit sales Apple's total is growing as well. That's always a positive.

  • Reply 3 of 40
    gprovidagprovida Posts: 258member
    Suspect data,quality from Gartner, IDC, et al. Aside, the profit share changes year over year would be more interesting. Grabbing share at the expense of profit is "easy," but eventually the piper must be paid. The PC business is a classic example, where the profit and margin is owned by a Apple with small albeit growing share.
  • Reply 4 of 40
    cnocbuicnocbui Posts: 3,613member
    Quote:

    Originally Posted by sog35 View Post

     

    SAMDUNG is in huge trouble.

     

    Their top end Galaxy S5 is selling worse than the S4.

    Their flagship S5 was outsold by Apples 5C.

    Their total phones are down 4%

     

    We are nearing the point where all Android phones will be commoditized.  There will be no reason to buy a copycat $700 Samdung when you can buy a copycat $200 Chinese phone that is just as good.  I'd argue that some of the Xiaomi phones look better than Samdung at half the price.

     

    I predict in 12-18 months (basically by next holiday season) the premium Android market ($600+) will be basically on life support.  With nothing differentiating the high end Android phones to the Chinese stuff the market won't be willing to pay double or triple the price.

     

    The Android phone market will basically be the WindowsPC market.  The vast majority will buy the cheap crap with a very few opting for the top of the line.  If they want top of the line they will go to Apple.


     

    I agree with you.  I wouldn't be too quick to crow about it though, because it won't help Apple sell phones that cost 2 times what these commoditised android hardware flagships are selling for, it will just make Apple's premium pricing even harder to swallow.

     

    My son needs a new phone.  I was looking at getting him the 1+ One which is touted as an affordable flagship killer.  The 16 Gb version of this phone is $299 while the 64Gb model is $350.  These prices are for top end hardware specs and decent build quality (possibly)  The availability of such a bargain does not make me suddenly inclined to say 'that's a fantastic bargain , but it's too cheap, I'd rather pay nearly double that for an iPhone', quite the reverse.  It makes me more inclined to view the iPhone as over priced.

     

    The 1+ One isn't really available so I ditched that idea and have ordered an LG G2 instead.

  • Reply 5 of 40
    See, [@]Tallest Skil[/@]? Samsung is winnnnnnning. Every smartphone company should be comparing themselves to Sammy in their advertising, and not the number two company, Apple. Weird, right? It's almost as if Apple was number one and everyone wanted to beat Apple. But analysts say Apple is number two...hmmmm.
  • Reply 6 of 40
    yojimbo007yojimbo007 Posts: 1,165member
    Lets revisit this subject after iphone 6 is out ! ;)
  • Reply 7 of 40
    madisonmadison Posts: 5member
    As has been shown time and time again, all data from IDC, which is what is being used in this bulls**t article is skewed, manipulated data and is entirely useless for anything. Period!

    I continue to wonder why appleinsider.com continues to put up these contrived writers' work ...


    Madison
  • Reply 8 of 40
    asdasdasdasd Posts: 5,686member
    IDC has really just recategorized feature phones sold for a pittance as smart phones. Good luck with that one.
  • Reply 9 of 40
    icoco3icoco3 Posts: 1,474member

    How about an in depth study of the turnover of phones and how long they are used once purchased.  My personal assumption would be a majority of iPhone's sold are still in use 4-5 years later verses Android "devices" that will not see that type of lifespan.  What % of those sold are still in use for the different brands...now that would be interesting.

  • Reply 10 of 40
    rogifanrogifan Posts: 10,669member
    http://fortune.com/2014/07/28/pc-sales-estimates-how-the-sausage-gets-made/
    “So, the mantra became, preserve the growth rates; to hell with the actual numbers. Even the growth rates are fiction. The fudge is in the “others” category, which is used as a plug to make the numbers work out. In fairness, we did do survey work, calling around, and attending white box conferences and venues to try to get a feel for that market, but in the end, the process was political. I used to tell customers which parts of the data they could trust, essentially the major vendors by form factor and region. The rest was garbage.”
  • Reply 11 of 40
    Is it really a "smartphone" when its used like a feature phone with a large display?

    Until a low cost manufacturer starts impacting actual iPhone sales growth, AND MAKES A PROFIT DOING SO, I am not concerned. Losing profits/cash in a marketshare grab is not a sustainable business model.
  • Reply 12 of 40
    relicrelic Posts: 4,735member
    sog35 wrote: »
    SAMDUNG is in huge trouble.

    Their top end Galaxy S5 is selling worse than the S4.
    Their flagship S5 was outsold by Apples 5C.
    Their total phones are down 4%

    We are nearing the point where all Android phones will be commoditized.  There will be no reason to buy a copycat $700 Samdung when you can buy a copycat $200 Chinese phone that is just as good.  I'd argue that some of the Xiaomi phones look better than Samdung at half the price.

    I predict in 12-18 months (basically by next holiday season) the premium Android market ($600+) will be basically on life support.  With nothing differentiating the high end Android phones to the Chinese stuff the market won't be willing to pay double or triple the price.

    The Android phone market will basically be the WindowsPC market.  The vast majority will buy the cheap crap with a very few opting for the top of the line.  If they want top of the line they will go to Apple.

    Your calling doom a little too quickly for Samsung, though their quarter wasn't up to snuff it's not like their in the black. Before you start with such predictions, give it at least a year. As far as people stopping with high end Android phone purchases there is absolutly no proof to back that up. Yes China has been very successful in producing quality handsets at a bargain but their not available without jumping through hoops in Europe or the U.S., especially by any mobile provider. Nor will company's like HTC, Samsung, LG, Sony, etc. stand still and allow an influx of these handsets to make it into these markets without so much as a fight. Also not everyone who owns an Android device secretly want an iPhone, the Android OS has many features that just aren't available in iOS. Personally I have avoided the iPhone because them, though version 8 of iOS looks to be the one that I might finally embrace. That is if I can choose my own browser as a default, handset has more then 1GB of RAM and a filemanager where I can access not only my local files but all of my cloud storage from a single app (this is very important to me and I won't compromise). I would also like to see my home directly when I plug the phone into my computer.
  • Reply 13 of 40
    jungmarkjungmark Posts: 6,926member
    So are these Others the no name brands, cheap POS, or something else Apple chooses not to compete with.

    Also what are the definition of smartphones these companies use?
  • Reply 14 of 40
    jd_in_sbjd_in_sb Posts: 1,600member
    In a few years there will be two smartphone markets: 1) Apple selling premium iPhones with a healthy profit, and 2) cheap, generic Android phones that make no profit. The Samsung brand will be just another drop in the Android ocean.
  • Reply 15 of 40
    woochiferwoochifer Posts: 385member
    Quote:
    Originally Posted by Relic View Post





    Your calling doom a little too quickly for Samsung, though their quarter wasn't up to snuff it's not like their in the black. Before you start with such predictions, give it at least a year. As far as people stopping with high end Android phone purchases there is absolutly no proof to back that up. Yes China has been very successful in producing quality handsets at a bargain but their not available without jumping through hoops in Europe or the U.S., especially by any mobile provider. Nor will company's like HTC, Samsung, LG, Sony, etc. stand still and allow an influx of these handsets to make it into these markets without so much as a fight. Also not everyone who owns an Android device secretly want an iPhone, the Android OS has many features that just aren't available in iOS. Personally I have avoided the iPhone because them, though version 8 of iOS looks to be the one that I might finally embrace. That is if I can choose my own browser as a default, handset has more then 1GB of RAM and a filemanager where I can access not only my local files but all of my cloud storage from a single app (this is very important to me and I won't compromise). I would also like to see my home directly when I plug the phone into my computer.

     

    The proof is coming in with Samsung actually reporting a quarter-over-quarter DECLINE in revenue and seeing their margins squeezed. This is not a mere leveling off of growth, which the analysts used to crucify Apple beginning two years ago, but actual revenue declines. These unit decline estimates merely follow on from what Samsung actually reports (recall that unlike Apple, Samsung does not report actual smartphone unit shipments or sales). In an overall market that has continued growing, Samsung has gone into decline.

     

    Where does Samsung differentiate themselves from other high end Android OEMs and fast rising Chinese Android OEMs? Their advantages came from massive production economies of scale and a marketing budget that outsizes nearly all of the other smartphone OEMs combined. While the analysts obsess over the comparative numbers with Apple, Samsung's real battle will be against other Android OEMs. This is where their strategy of trying to cover every conceivable market segment will come back to haunt them.

     

    Their overall numbers include low margin, low end models, where they are now losing ground to Chinese OEMs in a big way. And the high end segment is no longer growing fast enough to make up for the steep losses Samsung now takes in the lower end. This poor showing occurred during the introductory quarter for the Galaxy S5, which makes the numbers all the more disastrous for them. Consider that Apple still showed year-over-year growth in a quarter where new high end Android models came into the market, and iPhone demand starts tapering off in anticipation of the new models coming out in September.

     

    With cheap Chinese Android OEMs on the rise and poised to make a big push into developed markets, this puts additional pressure on established Android OEMs, and Samsung in particular. With more US carriers now pushing BYOD and contract-free plans, the hoops that you speak of are much less of an obstacle than they were even a year ago.

     

    Because they control their own platform and have gone into exotic materials in a way that even Samsung cannot follow, Apple is less vulnerable to this kind of channel flooding.

  • Reply 16 of 40
    woochiferwoochifer Posts: 385member
    Quote:

    Originally Posted by jungmark View Post



    So are these Others the no name brands, cheap POS, or something else Apple chooses not to compete with.



    Also what are the definition of smartphones these companies use?

    As indicated in that Fortune link, I suspect that the "other" category is just a catch all where the unaccounted-for data winds up. It could also include any number of white-labeled feature phone replacement models that have a touchscreen, but otherwise can barely function as a smartphone.

  • Reply 17 of 40
    hexclockhexclock Posts: 1,243member
    relic wrote: »
    That is if I can choose my own browser as a default, handset has more then 1GB of RAM and a filemanager where I can access not only my local files but all of my cloud storage from a single app (this is very important to me and I won't compromise). I would also like to see my home directly when I plug the phone into my computer.
    Apple will probably never let you browse the IOS file system, but you could always jailbreak the phone.
  • Reply 18 of 40
    relicrelic Posts: 4,735member
    Quote:

    Originally Posted by jd_in_sb View Post



    In a few years there will be two smartphone markets: 1) Apple selling premium iPhones with a healthy profit, and 2) cheap, generic Android phones that make no profit. The Samsung brand will be just another drop in the Android ocean.

    Sad world we live in right now.

  • Reply 19 of 40
    relicrelic Posts: 4,735member
    Quote:

    Originally Posted by Hexclock View Post





    Apple will probably never let you browse the IOS file system, but you could always jailbreak the phone.

    I don't need the entire file system, just my home directory.

  • Reply 20 of 40
    dasanman69dasanman69 Posts: 13,002member
    relic wrote: »
    Sad world we live in right now.

    How is it nobody else sees that?
Sign In or Register to comment.