January 31, 2018 12:49
Samsung has ceded the top spot in India's burgeoning smartphone market to China's Xiaomi.
Samsung ruled supreme in India's smartphone market, scaled at more than 100 million phones a year, since 2011. But Chinese rivals aggressively expanded their presence in India, Southeast Asia and Europe and are now posing a direct threat.
Even as Samsung was battling it out with Apple in the premium market, Chinese rivals expanded their share of the affordable market, trapping Samsung awkwardly somewhere in between.
◆ Waning Market Dominance
Hong Kong-based market researcher Counterpoint Research said, Samsung achieved a 23-percent share of the Indian market in the fourth quarter last year, allowing Xiaomi to overtake it with 25 percent. U.K. market researcher Canalys estimates that Xiaomi shipped 8.2 million smartphones to India last quarter and Samsung 7.3 million.
Even until the fourth quarter of 2016, Xiaomi accounted for just a nine-percent share of the market, but it caught up by the third quarter last year. Park Jin-suk at Counterpoint said, "Xiaomi's strategy of rolling out affordable smartphones with high-end features paid off." Other Chinese smartphone makers rank at No. 3 to 5, with Lenovo, Vivo and OPPO at six percent each.
"It's very important for Samsung to maintain a lead in India, which is the world's second-largest market for smartphones," an industry insider said. "Samsung is probably feeling quite threatened right now."
Samsung's global smartphone market share has also been declining since it peaked at 24.7 percent in 2014. Market researcher Strategy Analytics forecast it will fall to 19.2 percent this year, dropping below the 20-percent level for the first time in six years.
Meanwhile the market shares of its Chinese rivals are on the rise. Huawei's has already surpassed 10 percent, while OPPO and Xiaomi's slices are expected to top seven percent. In their home market, the biggest in the world, they already account for more than 70 percent and Samsung for a paltry 1.6 percent.
Meanwhile Samsung cannot seem to beat Apple in the global premium market no matter how hard it tries. According to U.S. market researcher CIRP, Apple accounted for 39 percent of the American market for smartphones last year and Samsung 32 percent. Samsung failed to narrow the gap in spite of lackluster sales of Apple's iPhone X.
◆ New Strategy
Samsung's answer is to speed up the release of new models and aggressively target the global premium market. It is unveiling its flagship Galaxy S9 at the Mobile World Congress in Spain next month. It launched the Galaxy S8 a month later last year.
It is also minded to speed up the release of the bigger Galaxy Note 9 slated for this fall, plus a marketing blitz targeting the U.S. and China.
Industry watchers say it all depends whether Samsung can release a foldable smartphone either this year or in 2019. Market researcher Roh Geun-chang said, "Smartphones are all more or less the same now, so simply rolling out new models is not enough. You need a radically new model or put in advanced artificial intelligence functions to thwart the competition."
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