Three-Frontrunner Race is Forming in World Smartphone Market

Samsung Electronics widened its gap with second-ranked Apple by chalking up a 22.3% share in the global smartphone market in the third quarter of 2017. However, Apple is expecting the highest quarterly sales in the fourth quarter with the iPhone X. The three major Chinese smartphone makers -- Huawei, Oppo and Xiaomi –- are showing rapid growth as their combined market share eclipsed that of Samsung.

According to data on global smartphone shipments in the third quarter of 2017 released by market researcher IDC on November 2 (local time), Samsung Electronics shipped 83.3 million units, up 9.5% year on year. Its market share sat at 22.3%.

"We confirmed strong demand for the Galaxy Note 8 in the early period of its launch," IDC said. "The Galaxy Note 8 will completely offset the failure of the Galaxy Note 7 last year." Accordingly, IDC forecast that Samsung’s growth would continue in the fourth quarter. However, the amount of Samsung’s sales sank as sales of entry-level and mid-range devices such as the Galaxy J increased in the third quarter. Samsung's third-quarter sales dwindled 19% quarter on quarter to 3.29 trillion won.

Apple's shipments grew 2.6 percent year on year to 46.7 million units, recording a 12.5 percent share of the market. Apple which releases new products in the fall is traditionally weak in the third quarter. Apple began to receive pre-orders of the iPhone 8 and iPhone 8 Plus in the first-tier countries on September 15. In addition, the launch of the iPhone X in the fourth quarter led to sluggish early sales of the iPhone 8. However, Apple expects to record the highest-ever sales in the fourth quarter of the year when the iPhone X launch will meet a peak season at the year’s end.

"Despite the late launch of the Apple iPhone X, demand for the iPhone 8 is forming mainly in major countries such as Germany and China," said market researcher Strategy Analytics (SA). "Huawei continues to trail Apple so competition to secure second place is expected to further intensify next year."

The growth of Chinese smartphone makers was robust also in the third quarter. The top three Chinese smartphone companies recorded a combined market share of 26.1%. In particular, Huawei sold 39.1 million units, an increase of 16.1% over the same period of the previous year, with a 10.5% market share and continued to compete for second place with Apple. IDC explained that sales of Huawei’s flagship models such as the 'Mate 9' and 'P10' had been steadily growing. IDC also stated that the upcoming Mate 10 and Mate 10 Pro will compete with Samsung’s and Apple's premium models.

Oppo recorded a market share of 8.2%, recording shipments of 19.7 million units, up 30.7 million units from a year earlier. Analysis says that the company succeeded in expanding its sales in the entry-level and mid-range market through strong marketing. In particular, the R11 was honored as the most popular model in China. Oppo recently expanded into the Indian market.

Xiaomi rose to No. 5 with a whopping 102.6% growth in this quarter. Shipments amounted to 27.6 million units in the third quarter, accounting for 7.4% of the market. Online festivals conducted in India in September significantly contributed to its strong third quarter. Xiaomi also revised its marketing strategy by shifting its focus to strengthening its offline sales network from the previous online sales strategy. This change paid off.

Meanwhile, overall smartphone shipments grew 2.7% year on year to 373.1 million units. The top five companies accounted for 60.9% of the market. In the same span of last year, the top five for 53.6%. This means that top rankers accelerated their dominance of the market.

"While small companies except for the top five companies are struggling to grow continuously, industry leaders are forming two camps," said Ryan Reith, vice president of IDC. “First of all, even though Google and LG launched flagship products, Samsung, Apple, and Huawei can lead the high-end market. It was confirmed that a handful of Chinese companies are expanding enormously in markets outside of China."