Sharp Decrease
Korean manufacturers’ smartphone exports dropped by 35.5 percent year-on-year last month due to the release of Apple’s iPhone 6 and a rapid sales decline in China and the ASEAN region.
The Ministry of Trade, Industry and Energy announced on Nov. 6 that smartphone exports totaled US$1.1 billion last month. The export amount had been US$900 million in September 2014, 13.4 percent less compared to the same period of 2013.
The total exports from the information and communication technology (ICT) sector decreased from US$16.23 billion to US$16.07 billion between October 2013 and October 2014 due to the sluggish performance of the segment. Meanwhile, the ICT imports increased 1.7 percent to US$7.89 billion, with mobile phone imports going up by 64.4 percent.
Korea’s smartphone exports to the United States rose from US$510 million to US$600 million between October 2013 and October 2014. However, the 17.64 percent increase is easily eclipsed by the 82.14 percent spike that was recorded between October 2012 and October 2013. Besides, the exports to the EU dropped by 67.47 percent, from US$495 million to US$161 million, and those to Japan by 49.77 percent from US$219 million to US$110 million during the same period. October is a peak season for electronics manufacturers because it marks the beginning of the Christmas shopping season in advanced countries. However, Korean smartphone manufacturers could not enjoy it this year due to the new iPhone launched in the previous month.
They showed poor performance in other markets, too. Their smartphone exports to the ASEAN region and China plummeted from US$64 million to US$20 million and from US$40 million to US$21 million during the period, respectively.
Korean makers have a serious dilemma to deal with. Samsung Electronics, which was overtaken by Apple in the third quarter of this year, is now behind Xiaomi in the Chinese mobile phone market, including the feature phone segment. LG Electronics is also stuck between Apple and Xiaomi.
Market research firm Strategy Analytics recently announced that Xiaomi recorded a market share of 15.4 percent in China during the quarter to beat Samsung Electronics by a margin of 1.9 percentage points. The market shares are 16.2 percent for Xiaomi and 13.3 percent for Samsung Electronics when feature phones are counted out.
In the third quarter, Xiaomi ranked third in the global smartphone market and fifth in the global mobile market. Although still leading the latter, Samsung Electronics failed to break the 80 million unit sales volume mark in both the second and third quarters, after having hit 89 million in the first quarter. LG Electronics sold 16.8 million smart phones in the third, but failed to catch up with Xiaomi.
“Samsung Electronics is trying to win over Chinese consumers with mid-end handsets such as the Galaxy A3 and A5, but an increasing number of them are opting for China-made smartphones,” said an industry expert, adding, “Once Chinese companies come up with high-spec yet low-price phones, Korean manufacturers will find it very hard to tackle them.”