Apple and Samsung lose market share in Q1 2017
A Chinese smartphone (FONE) manufacturer revolution is currently in the making. World leaders Samsung and Apple are threatened by the growing presence of Chinese brands in global markets. As per a report by market research firm Gartner, in the first quarter of 2017, Samsung (005930.KS) and Apple (AAPL) lost market share while Chinese smartphone manufacturers like Huawei, Oppo and Vivo gained. Samsung continued to stay on top, but its market share fell from 23.7% to 20.7% in a year as a consequence of recall of its Galaxy 7 phones last year. Meanwhile, Apple’s market share shrank to 13.7% to 14.8% last year as sales of its iPhones remained flat during the quarter.
While Samsung and Apple retained their top spots in Q1 2017, Chinese manufacturers Huawei, Oppo and Vivo combined accounted for one-quarter of total global smartphone sales. Their combined market share was 24% in Q1 2017, an increase of 7 percentage point year over year.
Competition from Chinese brands is intensifying
These three Chinese brands are creating a market for themselves inside as well as outside of China. Experts expect Chinese manufactured phones to become market leaders for worldwide shipments by the end of 2017. So how and why are Chinese phones growing?
“Their lean portfolio also helped them scale faster,” says an analyst. Anshul Gupta, Research Director at Gartner, stated, “The top three Chinese smartphone manufacturers are driving sales with their competitively priced, high quality smartphones equipped with innovative features.” Buyer preferences are shifting towards high quality phones at affordable prices which is positive for Chinese brands. These companies have also gained from “aggressive marketing and sales promotion” in fast growing markets like India and Indonesia.