Huawei and Xiaomi post huge marketshare gains as Samsung drops 13 percent

Samsung’s mobile phone sales have been taking a hit this year. It’s a downward trend that started during last year’s holiday quarter and has persisted throughout 2018. Both IDC and Strategy Analytics report that Samsung’s smartphone sales have dipped around 13 percent in the recent quarter. That follows a 10 percent decline in Q2, a 2 percent drop in Q1, and a 4 percent dip in Q4 2017. It’s a clear sign that Samsung’s Galaxy Note 9 and Galaxy S9 devices haven’t been competitive at the high-end, and Samsung is now losing ground in the mid- and low-end parts of the smartphone market.

Huawei, Samsung’s main Chinese rival, has soared this year. Huawei’s smartphone shipments are up around 32 percent this quarter, and the company has once again (for the third time) surpassed Apple as the world’s second largest smartphone brand. Much of that growth will be thanks to the popular P20 flagship handset pushing consumers to consider Huawei devices and its mid-range Honor handsets. Huawei has a tiny presence in the US, but if the company can battle warnings from the FBI, CIA, and NSA to not use its devices then it’s another key market to drive further growth.

Xiaomi, another big Chinese rival to Samsung, is also seeing growth as Samsung declines. Xiaomi’s smartphone shipments are up around 20 percent in the recent quarter, placing it fourth behind Apple in global smartphone shipments. “Samsung is losing ground to Huawei, Xiaomi and other Chinese rivals in the huge China and India markets,” says Neil Mawston, Executive Director at Strategy Analytics. “Samsung must solve its China and India problems before it is too late.”

Samsung admits that it’s struggling at the mid- to low-end of the smartphone market, but in its earnings guidance it hints that things might improve soon. Samsung expects shipments to rise in Q4, “particularly for its enhanced mass product lineup including the new Galaxy A7 and A9.” Samsung also predicts that the overall smartphone market should grow in 2019, but whether the company is part of that growth remains to be seen. Samsung is reportedly launching three Galaxy S10 models and a foldable phone early next year, so it’s bound to be a competitive year for the world’s largest smartphone maker. Samsung’s foldable phone is expected to first appear during the company’s developer conference next week.

While these high-end devices are essential for Samsung’s smartphone brand, it’s the increased competition from Chinese rivals in the mid- and low-end smartphone market that will shape Samsung’s 2019. Huawei and Xiaomi have mastered the art of bringing premium features to mid- and low-end smartphones, and there’s even more Chinese competition that’s ready and willing to challenge Samsung’s dominant position.

https://www.theverge.com/2018/11/2/18055094/samsung-smartphone-sales-decline-2018-report