Losing Ground to Chinese Competitors
Samsung Electronics took the top spot among global smartphone makers in the first quarter by shipping 77 million units, Strategy Analytics (SA) said on June 22. Second-ranked Apple shipped 57 million units. However, in the global 5G smartphone market, Samsung Electronics placed fourth.
Although Samsung Electronics regained its No. 1 position in the global smartphone market after losing it to Apple in the fourth quarter of 2020, it continues to struggle in the 5G smartphone segment. This is because it is losing ground to Chinese makers as well as Apple.
Samsung Electronics shipped 17 million units (12.5 percent) of 5G smartphones during the first quarter of 2021, ranking fourth after Apple and Chinese companies. A year ago, it was ranked first with a 35 percent market share.
On the other hand, Apple topped the list with a 29.8 percent share (40.4 million units) thanks to strong sales of the 5G iPhone released in 2020. Chinese companies Oppo (15.8 percent, 21.6 million units) and Vivo (14.3 percent, 19.4 million units) came in second to third, respectively, while Xiaomi slipped from fourth place in the fourth quarter of 2020 to fifth (12.2 percent, 16.6 million units).
Samsung’s fall is blamed on its sluggish 5G smartphone sales in China, the world's largest 5G smartphone market. China accounted for 50 percent of the world's 5G smartphone sales in 2020. Samsung Electronics accounted for only 0.6 percent of the Chinese 5G smartphone market.
In 2013, Samsung Electronics was ranked first in China with a 20 percent market share. But Chinese consumers boycotted Korean products over the deployment of the Terminal High Altitude Area Defense (THAAD) in Korea in 2016. On top of that, the market share of the Galaxy Note 7 plunged below 1 percent due to its fires.
Officials at Samsung Electronics’ Smartphone Business Department are racking up their brains to come up with countermeasures. If the company fails to make a breakthrough in the rapidly growing 5G smartphone market, it is a matter of time to lose its No. 1 position in the global smartphone market, too. Samsung Electronics has been staying at the top of the market for 10 years since 2011. In response, the Korean tech giant recently conducted a management diagnosis, the first time since the Galaxy Note 7 ignition accident in 2016.
Global 5G smartphone shipments will reach 620 million units in 2021, SA forecast. Gartner, another market research firm, also expects annual 5G smartphone shipments to surge from 213.26 million units in 2020 to 538.53 million units in 2021.
“Samsung Electronics is likely to fight an uphill battle against Apple and Chinese companies for the time being,” said an industry watcher. “The highest hurdle for Samsung Electronics to clear is how to overcome its slump in China.”
Samsung Electronics is likely to face pressure from Oppo, Vivo and Xiaomi not only in China but in Western Europe. But China's 5G smartphone growth rate is slowing down, and Samsung Electronics is expanding budget 5G smartphone models to regain its market share.