Phone

Samsung feels pressure from the Chinese as phone shipments decline

Chinese smartphone manufacturers like Huawei and Xiaomi are giving Samsung a tough time particularly in key markets. The decline in the Korean giant’s smartphone shipments started late last year. That has remained the case throughout this year. Strategy Analytics reveals that Samsung’s phone shipments have declined 13 percent in Q3 2018 YoY.

The shipments declined by 4 percent in Q4 2017. This year, they were down 2 percent in Q2, 2018 and 10 percent in the previous quarter. This goes to show that Samsung’s flagship devices like the Galaxy S9 and Galaxy Note 9 haven’t done enough to arrest the slide. The company’s entry-level and mid-range handsets significantly contribute to its market share but Samsung itself acknowledged recently that it’s struggling in this segment as well.

Samsung’s phone shipments continue to decline

This confluence of the high-end not delivering the intended results and the mid-range coming under pressure continues to erode Samsung’s lead. On the other hand, its Chinese rivals have thrived in the same period. Huawei saw a 32.5 percent surge in smartphone shipments compared to Q3 2017. It accounted for 14.4 percent of the smartphone market in Q3 2018 compared to Samsung’s 20.1 percent.

This is the second time that Huawei has overtaken Apple for the second spot on the list. Xiaomi also registered a 19.1 percent year-over-year increase in quarterly shipments. Huawei has a stated goal of overtaking both Samsung and Apple. It wants to become the top vendor of smartphones in the world and it continues to close in on that goal.

What’s more impressive is that Huawei has been able to achieve this position when it has essentially been declared persona non grata in the United States. That entire lucrative market is basically closed off to Huawei. Yet, the company is within a fighting chance of snatching the lead from Samsung.

Samsung is fast losing ground to these companies in the key markets of China and India. It has recently revamped its strategy to better compete in these markets. Samsung is now making more affordable devices that are packed with technologies that we haven’t even seen in flagship devices.

The Galaxy A7 and Galaxy A9 are perfect examples. Samsung’s first triple and quad-camera smartphones are mid-range devices. It expects shipments to rise in Q4 2018 on the back of these handsets. It will also be launching a foldable smartphone next year to offer a unique product in the high-end segment in addition to three models of the Galaxy S10.

Whether or not that would be enough to hold off the Chinese challenge remains to be seen.

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keithsanantonio
keithsanantonio

It’s because Samsung’s phones are much higher in price. It is a contributory factor for key markets. Consumers preferred to buy phone which is less in price but with high specs. Also, partnership of Huawei with different telcos of every country contributed as well. Another is the promos offered by Huawei compare to telcos is much more than Samsung. Like here in the Philippines, Huawei put more freebies on Huawei phones compare to Samsung. Also, contests on facebook have a great items compare to Samsung’s photo contest on Note 9 with a 5000mAh powerbank as a price. I’ve been using… Read more »

Sleepypandauk
Sleepypandauk

Perhaps that’s why they have started using other OMD to manufacture their phones in Asia, in order to reduce the cost of their phones and provide better specs by outsourcing

GS7edge
GS7edge

IMO Apple is not really Samsung’s opponent anymore, these Chinese OEMs are.

MStuart
MStuart

The problem is that hardware specs are not going to save them. They’re already good enough for most people and they’ve been for years.

Software is a field where Samsung have the muscle to differentiate themselves, if done right. Same with retail presence and support. I’ll gladly pay an extra over a competing product if there’s a physical store where I can get a exchange/replacement in under one hour under warranty if a hardware fault develops, for example. Exceptional customer support is something most Chinese vendors won’t be able to match.

Bobbingalong
Bobbingalong

In Hong Kong it’s amazing to see it’s either apple or for the Android offering the shops are pushing the Chinese oem phones rather than Samsung.

When asked why, the simple reply was that you get more for the money when buying the mate 20 pro or the p20 pro over an s9 or note 9.

Hopefully they can turn around with the S10. But they do need good specs to keep customers interested. 4gb and for 2019 5gb ram or single camera on a flag ship is a joke and for most people it’s an immediate dismissal.