Two Roads Diverged
Apple, which has already surpassed Samsung in sales and profitability, is poised to overtake Samsung for the first time in market share by shipments with the iPhone 15 series scheduled to be unveiled in September. This has presented a challenge for Samsung Electronics, which has been the undisputed leader in the smartphone market in terms of shipments. Samsung has maintained the top spot with a 20 percent share in the first half of this year, but the gap with Apple has slowly narrowed to 3 percentage points.
As the smartphone market enters a period of maturity, Samsung and Apple, the industry’s No. 1 and No. 2 players, take different paths, according to industry observers on Aug. 27. Market research firm Counterpoint Research forecasts that global smartphone shipments will reach 1.15 billion units this year. That is down 6.5 percent from last year and the lowest level since 1.049 billion units in 2013. Gartner also predicts that smartphone shipments will reach up to 1.2 billion units in 2023.
In response, Samsung Electronics has begun to make all-out efforts to defend its top spot by expanding its product lineup while securing flagship sales with the Galaxy Z Flip5 and Galaxy Z Fold5, new foldable phone models that launched globally in August. According to industry sources, Samsung is in the process of going through a certification process ahead of the launch of the Galaxy S23 Fan Edition (FE) in the second half of the year.
Samsung has held the top spot in smartphone sales with its Galaxy A and Galaxy M budget models. The FE model retains the basic concept of the top-of-the-line Galaxy S series but comes with an economical mobile application processor (AP) and camera.
However, since the FE model has a customer base overlapping with the existing Galaxy A series and may affect the premium image of the Galaxy S series, Samsung Electronics is reportedly considering renaming the model or releasing the FE model only in some overseas markets.
Samsung Electronics is active in expanding market shares in strategic markets. In Japan, where Samsung Electronics began a pre-ordering period for the Galaxy Z5 series, the Korean smartphone giant has begun outdoor advertising ahead of its official launch. Samsung Electronics is running outdoor advertisements in Shibuya, Tokyo, ahead of its official launch on Sept. 1. The company posted a 10.9 percent share of the Japanese market in the second quarter of this year. This month the company also launched the Galaxy F34 5G, a budget smartphone model in the 200,000 won range, in India, where it holds the top spot.
On the other hand, despite a smartphone market slump, Apple is set to take the wraps off its iPhone 15 series in September, raising its retail price. In particular, there is speculation that the price of the iPhone 15 Pro and Pro Max, the top models, will climb sharply compared to their predecessors.
This will allow Apple to further raise the new model’s average selling price (ASP). Apple already sells smartphones that are nearly three times more expensive than those of Samsung with an ASP of over US$1,000.
This suggests that Apple, which sells fewer low- and mid-priced models than Samsung Electronics, will be more immune to the market downturn for the time being. Apple has historically responded to mid-range market demand with older iPhones rather than launching separate low-end models.