Asian worries for Samsung and Apple as local brands chop up the market

Hometown boys mean big trouble in China

Figures from research company Canalys indicate both Apple and Samsung are feeling the pinch in the world's two fastest growing mobile markets: China and India.

In Q2 2015, one in three smartphones shipped in China came from Huawei or Xiaomi, with the latter being the best-selling smartphone in the Asian giant, with a 15.9 per cent market share, according to Canalys estimates.

However, Huawei is hot on its heels, growing 48 per cent sequentially, and the fastest growing vendor in the top ten. Huawei’s 15.7 per cent share left a very slim lead for Xiaomi. Apple fell to a pretty ordinary third place, followed by Samsung and then Vivo.

"The China smartphone market continues to mature [and] competition among major brands has never been so intense," said Jingwen Wang, analyst at Canalys. "Huawei recorded the highest smartphone shipments in its history without compromising its product margin or profitability."

"Apple and Samsung have both increased their sales activities in the Chinese market, expanding rapidly in channel coverage through flagship stores and small-to-medium size phone retailers respectively. Xiaomi is under immense pressure to maintain its top position in the quarters to come," he continued.

Chinese economic woes might make it even tougher for Samsung and Apple, with the local boys having better priced products and phones in the mid and high tiers. Canalys told The Register that Huawei had come on in “leaps and bounds” in product quality.

And it’s not just a Chinese vendor – it’s also doing well in Southern Europe. While 55.6 per cent of Huawei’s smartphone sales are in China, EMEA accounts for 25 per cent.

Samsung’s lead in India is under threat too. While it is top of the pile with a 21 per cent share of the Indian market, local manufacturer Micromax is number two with 19.1 per cent, with the next three places being occupied by Intex, Lava and Lenovo.

Canalys wasn’t prepared to give its prediction for Apple’s market share (you have to cross its palm with silver for that) but agreed it was “considerably less than five per cent".

Xiaomi is looking to follow Huawei into Europe and the US. While it is not yet selling phones officially, it has set up a sales and distribution network – initially for accessories, with phones to follow.

It’s too soon to say we’ve reached peak Apple, but it’s worth remembering that twenty years ago Motorola had an “unassailable” 35 per cent market share, with NEC as the number two manufacturer in the UK. Ten years ago Nokia was riding high with a 40 per cent market share, with Ericsson a strong number two.

Apple has been in the market for eight years. ®