Shipments exceed 1.16bil units, Chinese brands with almost 40% share
Samsung and Apple still dominate, but tide is shifting
SMARTPHONE vendors globally shipped a total of 1.167 billion units in 2014, representing a year-on-year increase of 25.9%.
According to data from Taiwan-based research house TrendForce, market leader Samsung and No 2 vendor Apple maintained their positions, with combined shipments of 518 million units.
However, these incumbents came under pressure from Chinese brands which performed strongly during the year, grabbing almost 40% of global shipments and representing six of the top 10 smartphone brands worldwide (see Table 1 below).
“2014 was definitely an impressive year for Chinese brands as they gained more share of the global market,” said Avril Wu, global smartphone analyst of TrendForce.
The report cites two contributing factors: The high cost-performance ratio of Chinese-branded smartphones, and the rising domestic demand in China.
Compared with a year ago, Lenovo maintained its position at third place, Huawei and Xiaomi ousted LG from its fourth position, TCL (marketed as Alcatel outside China) jumped three places up with Coolpad and ZTE trailed closely behind, leaving Japanese electronics giant Sony with the last spot on the Top 10 list.
As previously reported by Digital News Asia, 2014 proved to be a tough year for Samsung’s handset business. Despite holding on to its No 1 ranking, its global market share tanked to 28% from 32.5% the previous year, due to competition on two fronts.
According to Wu, Samsung’s premium, large-screened Galaxy Note models (pic) faced stiff challenges from Apple’s iPhone 6 Plus, while its mid-range and low-end smartphone shipments were undercut by inexpensive Chinese brands.
This resulted in downward revisions of Samsung’s overall shipment targets, with annual shipments rising only 8.4% (around 326.4 million units).
Samsung’s bitter rival Apple had a banner year as its new iPhone 6 and iPhone 6 Plus models helped the company achieve a 24.5% year-on-year growth, with 191.3 million units shipped.
The iPhone 6 Plus in particular, addressed the gap in Apple’s portfolio of smartphones with screen sizes above 5 inches, and thus significantly raised the fourth quarter shipping ratio.
However, Apple’s market share remained flat at 16.4%, as its Android-based rivals continued to gain ground.
Among such rivals is Lenovo, which officially finalised the acquisition of Motorola from Google during the fourth quarter of 2014. With the merger completed, Lenovo’s total shipments in 2014, including Motorola, exceeded 90 million units with an annual growth of above 100%.
It is ranked first among the Chinese smartphone vendors and third worldwide with a market share of 7.4%, a slight dip from last year, which was just shy of 8%.
Within China however, Lenovo’s top position is being threatened by both Huawei and Xiaomi, as growth from these two vendors far outpaced Lenovo’s.
For Huawei, its Honor 6 model marked the transition away from established chipset makers Qualcomm and MediaTek to power its high-end smartphones. Instead, the Honor 6 came packed with the Kirin 920, a chipset developed in-house by Huawei subsidiary HiSilicon.
“HiSilicon’s product roadmap shows that in the future it will pursue R&D (research and development) in mid-level and lower-end products,” said Alan Chen, Chinese smartphone analyst at TrendForce, adding that Huawei is also determined to eventually become self-reliant in chipset supply.
The move has translated to high performance smartphones at a lower price, and helped the company achieve an annual growth of around 70% with 70 million smartphones shipped.
Other factors such as overseas expansion, its rapid growth within China and good relations with telecom operators, also contributed to its rise.
But none of the Top 10 smartphone makers rose as fast as Xiaomi. TrendForce bestowed the vendor, which sells its wares primarily over the Internet, with the top prize for cost-per-performance products.
Its devices are priced lower than similar offerings from its international competitors, while its modified Android-based user interface has garnered a loyal fan base both in and outside of the Mainland.
Since its rise in China during the latter half of 2011, Xiaomi has been able to more than double its growth each year. In 2014, its annual shipment growth exceeded 200% with 60 million units shipped, and it even managed to, at one point, edge out China’s leading vendors Lenovo, Huawei and Samsung.
This was also the year that Xiaomi began its overseas expansion to countries like India, Indonesia and Malaysia.
The ‘dark horse’ in this list, according to TrendForce, is LG Electronics.
Even though the South Korean giant dropped two spots in the Top 10 list, it saw a 75.4% jump in shipments year-on-year, at 70 million units.
TrendForce analyst Avril Wu noted that LG’s strategy of “promoting high quality products at low prices” paid off with strong market reception to its flagship smartphone models, including the G3.
She Wu added that the 2K display on the G3 was a key success factor, saying “this showed LG’s advantage of having a display panel manufacturer under its wings.”
Yet, LG’s market share remained relatively flat at 6.1%, but it is still a far cry from the 4.3% it captured two years ago, when it first introduced the premium G series models.
Going forward, TrendForce believes that the continued uptake of 4G-enabled smartphones in China will be a strong factor in determining the winners this year.
Undoubtedly, the race (and race to the bottom in terms of price) will continue to be a hotly contested one.
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