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Samsung overtaken by Xiaomi in Chinese smartphone market

August 5, 2014

(Yonhap) — Samsung Electronics Co. yielded its top position to Xiaomi, a Chinese smartphone maker, in smartphone sales in China due to the emerging player’s increased sales of low-end models in the second quarter, data showed Tuesday.

Xiaomi took up 14 percent of China’s smartphone market in the April-June period, compared to the 12 percent posted by Samsung, the data released by industry tracker Canalys showed.

Industry watchers said the rise of Xiaomi is significant in that it only posted a market share of around 5 percent last year. In the first quarter, the company had 10.7 percent while Samsung held 18.3 percent.

Xiaomi’s growth, however, has a limited impact on the global smartphone market, as 97 percent of its shipments were in mainland China, Canalys said. The company is making moves to expand sales to cover Indonesia, Mexico and Russia.

Samsung took up 25.2 percent of the global smartphone market in the April-June period, down 7.1 percentage points from the 32.3 percent posted last year, separate data compiled by market researcher IDC Corp. showed.

Contrary to the waning of traditional winners, Chinese players have made significant strides to catch up to bigger rivals, with Huawei expanding its sales to 20.3 million units in the second quarter, up 95.1 percent from a year earlier. Its market share came to 6.9 percent.

Samsung was also overtaken by local players in the Indian handset market, posting a market share of 14.4 percent over the second quarter while Micromax Mobile held a comparable figure of 16.6 percent, according to Hong Kong-based Counterpoint Research.

While Samsung managed to remain the top smartphone maker with a share of 25.3 percent in India, Micromax Mobile narrowed its gap to 19.1 percent.

Samsung’s mobile division posted lackluster earnings for the April-June period, with its outlook for the third quarter also remaining dull due to the heightened competition in the low-end smartphone sector.

Samsung said operating profit of its IT and mobile business division, the company’s main revenue source, fell 29.6 percent on-year to 4.42 trillion won in the second quarter from 6.28 trillion won a year earlier.