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Apple, Xiaomi won big as Samsung's smartphone struggles continued in third quarter

Mikael Ricknäs | Dec. 16, 2014
A showdown between Samsung and Chinese will spur on better smartphone designs going forward.

iPhone 6 and 6 Plus have raised cameras.

A successful iPhone 6 launch in the U.S. helped Apple increase its share of the smartphone market in the third quarter, but nemesis Samsung Electronics struggled, with upstart Chinese manufacturers nipping at its heels and growing ever stronger.

Thanks to record sales in emerging markets and the popularity of Apple's new iPhone 6 and 6 Plus, overall smartphones sales to end users grew 20.3 percent to reach 301 million units during the third quarter, market research company Gartner said in its "Market Share: Devices, All Countries, 3Q14 Update" report on Monday.

Samsung's struggles continued unabated in the quarter. While the overall market grew, Samsung's sales dropped by about 9 percent to 73.2 million units. That was enough for a 24.4 percent market share, which still makes it the largest vendor by a large margin.

Samsung's product development team became too cautious, and paid a high price with the Galaxy S5, which failed to catch on with buyers. It is now under pressure to develop cooler products across its whole portfolio. The launch of the Galaxy Note 4 Edge with its curved screen has already showed that Samsung is willing to break new ground in the high-end segment. And the recent launch of the Galaxy A3, which has a metal unibody, shows the company is willing to use premium materials even on its lower-priced devices to claw back market share.

Apple was the second largest vendor with a 12.7 percent share. Its sales grew by 26 percent to 38.2 million units, thanks to the success of the two iPhone 6 models. The two smartphones were so popular in the U.S. they helped that market grow by almost 19 percent in the third quarter, Gartner said.

Huawei may have taken the third spot, but fewer than one million units separated it from Xiaomi and Lenovo in fourth and fifth place. They sold between 15 million and 15.9 million units, putting their market shares were between 5 and 5.3 percent. Xiaomi had the highest growth of the quarter, with an increase of 336 percent driven by strong performance in China where it became market leader.

To continue to grow, all three Chinese companies are dependent on selling more smartphones outside their home market. Lenovo has laid the groundwork for an international expansion with its acquisition of Motorola Mobility from Google. Xiaomi seems to be taking a more cautious approach: recently the company said it was scaling back its international aspirations to focus on India and Indonesia.

Attractive, lost-cost LTE smartphones will offer a chance for these companies to grow. While the high-end segment has become saturated for everyone but Apple, the market for more affordable products is still expected to grow.

 

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