Both Domestic, International
With exports of domestic semiconductors, displays, and electronic devices plummeting recently, concerns are growing that the Korean electronics industry is losing its market competitiveness.
According to sources in the Korean electronics industry on July 28, there were growing concerns that Korean smartphones, which are one of Korea’s main export items, are losing competitiveness to Apple’s iPhone and budget smartphone models from China.
Of course, Samsung Electronics sold 259.6 million smartphones last year, ranking first in the market in terms of units sold with the largest market share (22 percent) for the second consecutive quarter. However, when compared to Apple’s single smartphone model, which sold 224.7 million units last year, the Korean smartphone giant is losing ground, analysts say.
According to market research firm Counterpoint Research, the top-selling smartphone model in the world last year was the iPhone 13, which accounted for about 5 percent of the world’s total smartphone sales. The iPhone 13 Pro Max came in second and the iPhone 14 Pro Max third.
Samsung’s Galaxy smartphone series, on the other hand, had two models on the top 10 model list. The Galaxy A13, which is not part of the Galaxy flagship series, came in fourth and the Galaxy A03 10th. These models were popular in the populous regions of Latin America, India, and Africa. This indicates that Samsung’s Galaxy series is losing its power as a premium smartphone brand and has been pushed into the low-priced smartphone market.
Chinese smartphone maker Honor began to take preorders for its Magic V2 foldable phone in China on July 12. The Magic V2 weighs 231 grams and is only 9.9 millimeters thick when folded and 4.7 millimeters thick when unfolded, respectively. It is priced at 8,999 yuan (US$1,264), which is cheaper than the Samsung Galaxy Z Fold 4, which costs around two million won. Honor is outside the top five in the global market rankings, but in China it climbed to fourth place in the first quarter of this year with a market share of about 15 percent, surpassing Xiaomi and Huawei.
In some other markets, Korean companies have already lost to Chinese companies. These are the vacuum cleaner and drone markets.
According to GFK, a global market intelligence company, the Korean robot vacuum cleaner market grew to 290 billion won in 2022, up about 41 percent from the previous year.
Samsung Electronics and LG Electronics are selling robot vacuum cleaners by focusing on their Bespoke and Object Collection, respectively, but their respective global market shares are minuscule. Roborock is No. 1 in the Korean robot vacuum cleaner market, and Ecovacs ranks first in the global market. Both are Chinese companies.
Korean companies are seeing an uphill battle in the wireless vacuum cleaner market as well. According to market research firm ReportLinker, the global cordless vacuum cleaner market is expected to grow from US$6.73 billion last year to US$9.43 billion in 2026.
However, Europe’s Dyson is dominating the premium market. Roborock’s Dyad Pro, a wet and dry cordless vacuum cleaner launched June 26, sold out within 11 days of its launch in Korea. In addition, Chinese company Xiaomi is also targeting the low-end wireless vacuum cleaner market with low-priced wireless vacuum cleaners in the 100,000 to 200,000 won range.
The drone market, which has been growing rapidly in recent years, is also dominated by Chinese products. According to the Drone Market Report, the global drone market is expected to grow from US$17.6 billion in 2019 to US$42.8 billion in 2025.
As of 2021, China’s DJI dominated the global civilian drone market with a 76.0 percent share. Intel (4.1 percent) and Unicorn (3.6 percent) followed DJI, but the gap was more than 18 times wider. While the United States and Israel dominate the military drone market, Turkey has recently expanded its share of the military drone market with its low-priced TB2 drone.
However, Korean drone companies had average sales of only 2 billion won per company. Their average number of employees was around 11. They posted 66.5 percent of their drone sales to public institutions.
Chinese-made drones are not only competitive in price but superior in technology, analysts say. According to data presented in a public hearing on the promotion of the Korean drone industry earlier this year, Korea’s drone technology was a mere 60 percent of the average level of leading countries such as China.