Korean phone manufacturer Samsung has long held the crown of the most sold smartphone brand in the market. Luxury and premium-focused Apple has held a close second, despite a flat performance by the California-based company in recent months.
Now, Apple has been unseated by an Eastern rival: Huawei.
In a recent study by Gartner, it was revealed that Chinese manufacturer Huawei had overtaken Apple in second place. This data was echoed by research conducted by research firm IDC a month earlier that showed Huawei in 2nd place during Q2 2018.
Gartner reported that the overall sales of smartphones to end users reached 374 million units in the quarter after a 2% increase.
Huawei sold 49.8 million devices, netting a market share of 13.3%, up 3.5% from the same period last year, while Apple’s market share decreased from 12.1% in Q2 2017 to 11%. The US company sold 44.7 million iPhones, but it seems that wasn’t enough.
Korean Samsung sold 72.3 million devices, but their market share dipped 12.7% in the quarter, WCCFTECH notes. The company did land a 19.3% market share, despite the dip in their market dominance.
Huawei’s shipments in the Middle East and Africa grew 76% year-on-year in H1 2018, while revenue surged 100%, Gene Jiao, president of Huawei Consumer Business Group in MEA told The National.
What makes Huawei’s achievement impressive is the fact that the company had been virtually banned from entering the US market, yet has still managed to land 2nd place globally. This blockade came directly from the US government, which claimed that Huawei devices allowed the Chinese company to spy on US citizens. This was discussed in the 2012 House Intelligence Committee report.
Huawei proves diversity beats luxury
As CNET notes, Huawei started in 1987 with a $2,500 investment by Ren Zhengfei, who was formerly with the Chinese military. It picked up steam in recent years by releasing cheap Android phones in China to cater to the local fervent demand for low-priced devices.
However, it got to where it is today by expanding throughout the world with high-end offerings like their Huawei Mate 20 Pro, or the Huawei P20 Pro.
By cementing itself as a jack-of-all-trades, just like Samsung, and offering devices across all price ranges, the company has net itself a wider range of customers to ultimately create a widespread user base and fandom. When friends and relatives of all ages and incomes come to you to show off their new Chinese device you’d not heard of before, you’re bound to pay attention to this rising juggernaut. Samsung and Huawei were the Toyoto to Apple’s Porsche.
Analytics firm Newzoo confirms this reasoning in their 2018 Global Mobile Market Report, which stated: “Samsung’s lead is mostly due to the company’s selection of budget devices, which fare well in developing markets such as India.”
Apple’s annually inflating price tags, coupled with less and less innovation year after year, has led to a slight shrinking in the US company’s fanbase.
Could there be some hope for them, with the launch of their 3 latest devices? These products will no doubt give Apple’s sales and market share a timely adrenaline shot.
Yet, it seems the impact won’t be as great as first imagined.
“Lines outside Apple stores when the iPhone XS and iPhone XS Max went on sale were smaller than they were in years past,” Business Insider reveals.
Citi Research Innovation Lab discovered that online searches for the word iPhone have also decreased in recent years.
(Graph by Citi Research Innovation Lab)
“We believe this indicates the market has been maturing, and customers are getting less excited for each new generation of iPhone,” they continued. “We suspect this is because of a slowdown in innovation and the saturation of iPhone in the addressable market.”
Apple’s iPhone XR is an attempt at the more budget-conscious consumer, yet it seems like a meager attempt, as this more “budget-friendly” device has a startling starting price of $749.
Since Apple cannot compromise their luxurious and premium brand image, they will have to innovate and seek the support of their most loyal fans to help keep them afloat and on top.