Apple has became the biggest smartphone maker in the world, as the company sold more phones in the Christmas quarter due to increasing demand in China. Apple sold 74.8 million iPhones, while Samsung sold only 73 million units.
Market analysts say that Apple’s iPhone sales increased by around 25 million units compared to the same period a year before, which was due to rising demand from China. As a result, profits of the company rocketed to a record $18bn in the final quarter.
It is not a secret that Apple has long outsold Samsung by value, but now it does so by volume as well. This can spells trouble for Samsung – especially coupled with its struggle with falling sales and shrinking earnings. The statistics say that Samsung sold about 10 million fewer phones than last year, due to falling demand for its flagship Galaxy S5 and intense competition at the market. The industry observers had to admit that Samsung’s performance deteriorated further during the Christmas period, when it lost about 10 percentage points in market share. Apparently, the South Korea giant still struggles to control its falling smartphone share, which reached its peak in the 3rd quarter of 2013.
In the meantime, such Chinese phone makers as Xiaomi, Huawei and Lenovo (which since a startup 5 years ago is currently valued at $45 billion) are competing with Samsung’s sales by offering high performance budget-priced smartphones and brands that younger customers increasingly identify with.
For instance, Xiaomi has more than doubled its market share over the last year and now accounts for 5% of sales, selling almost 19 million units in the final quarter of 2014 – up from 6 million in 2013. The company has already entered such developing markets as India, Indonesia and Mexico, and is ready to launch its accessories store in Europe. As for Lenovo, it holds the third place with 24 million phones sold, followed by Huawei with 21 million units.
As you can see, Samsung is currently fighting to avoid the downwards spiral – the one that almost killed once profitable mobile phone businesses like Nokia and Blackberry. The company has launched two updates to its flagship phone – S6 and S6 Edge with an unusual curved screen.
Overall, the smartphone market continues to grow. Sales of smartphones to end users amounted to 1.2 billion units last year, which is 28% more than in 2013. The most important part here is that Internet-enabled devices now take 2/3 of global mobile phone sales.