A recent research report published by Canalys indicates that five Chinese manufacturer namely Lenovo, Yulong, ZTE, Huawei and Xiaomi control 20 percent of smartphones shipment in Q2 2013 and China is by a large margin.
In Q2 2013, smartphone shipments from China totaled 88.1 million, more than double the United States’ 32.9 million. The quarter-over-quarter shipments growth of 108 percent is also the second highest in the major market. Conversely, the quarter-over-quarter growth of the United States of only 36 percent shows that the market is almost fully penetrated and is reaching a saturation point. The same applies to Japan and UK, which also are experiencing stagnant growth.
In China, Lenovo shipped 10.8 million out of the total 88.1 million smartphone shipments and is the region’s second largest vendor, topped only by Samsung. According to Canalys, the success of Lenovo in its home country is due to its large portfolio of products that are targeted at the low-end segment. Apparently, the same strategy also benefited one other Chinese maker, Yulong, which saw 216 percent quarter to quarter shipments growth from 3.4 millions to 10.8 millions worldwide.
India overtook Japan and UK to be world number three in terms of smartphone shipments this quarter, behind only China and the United States. Also, the quarter-over-quarter growth of 129 percent is the highest among the major markets. The explosive growth of India is caused by the market transition from feature-phone to smartphone.
Looking at each individual smartphone vendor, Samsung is still by far a worldwide leader with shipments totaled 75.6 million and a higher than average 55 percent quarter-over-quarter growth. Samsung’s dominant position is further strengthened by the fact that it is the market leader in two largest emerging market, China and India.
Apple currently held the second place with shipments totaling 31.2 million. However, with quarter-over-quarter growth of only 20 percent, the mission to defend the second place is not trivial. Traditionally, Apple only competes in the high-end segment with the pricing of its iPhones. Although the high-end segment admittedly continues to grow at a steady pace, there is no doubt that the explosive growth of smartphone shipments comes from the lower-end market. This is the reason Apple desperately needs a low-cost iPhone in order to battle in the lower-end segment, particular in the fast growing countries like China and India.
As mentioned before, Lenovo and Yulong benefited greatly from the growth of their local market. Both of these Chinese vendors enjoyed quarter to quarter growth of 131 percent and 216 percent respectively. With this, Lenovo successfully overtook LG and grabbed the third place for the first time in history. However, to challenge Samsung’s and Apple’s current position, local market is definitely not sufficient. Lenovo and Yulong need get out of China and expand internationally in order to gain market share.