Widening Gap in Market Share
Samsung Electronics’ marketing strategy releasing the Galaxy S7 early has been a huge success. The company sold more than twice as many smartphones as its global rival Apple in the first quarter.
According to market research firm TrendForce on Apr. 20, Samsung Electronics ranked first in terms of sales in the global smartphone market in the first quarter, selling 81 million units. As the company released its strategic smartphone Galaxy S7 a month earlier than usual, becoming a hit, its market share stood at 27.8 percent, up 2.5 percent point from the previous quarter.
Apple launched the iPhone 6S in last fall but its sales were lower than expected. Then, the company rolled out a new “budget” iPhone SE in the first quarter, but it ranked second with a 14.4 percent market share. Apple posted its largest quarterly decline ever for iPhone shipments, plummeting 43.8% from 75 million units in last year’s fourth quarter to just 42 million units in this first quarter. Sales of iPhone 6s have been lackluster as the model lacks exciting new features.
Samsung boosted its smartphone sales by launching the Galaxy S7 ahead of schedule, though the worldwide smartphone shipments in the first quarter of 2016 totaled 292 million units, down 18.6% from the previous quarter.
In particular, the market share difference between Samsung Electronics and Apple was as low as 1.2 percent point in the fourth quarter last year, but the figure skyrocketed to 13 percent point in the first quarter this year, showing a twofold increase.
Market analysts said Samsung Electronics made a remarkable achievement amid the slowdown in the global smartphone market.
However, the initial sales of the iPhone SE are lower than previous iPhones. Although the iPhone SE is an entry-level smartphone aiming to expand the global market share of iPhones, it is positioned in the mid-priced range.
In Korea, the iPhone SE is priced at 590,000 won (US$521) at the lowest. Since there is only 240,000 won (US$212) difference in price compared to the latest premium Samsung Galaxy S7 and the LG G5, there is no merit in price.
In addition, Chinese smartphone makers have released premium products at similar prices. So, industry sources think that whether Apple will be able to expand its market share with a 4-inch iPhone SE against them is still in question.