Home Business Apple On Top While Samsung Slips To Sixth Spot In China

Apple On Top While Samsung Slips To Sixth Spot In China

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Whenever one thinks of buying a smartphone, the first two names that often come to mind are Apple and Samsung. However, in China, it seems it is a different story in which Samsung is at sixth place.

Samsung struggling in China

In its latest report, the Korea International Trade Association (KITA) claims that for the quarter ending in June, Samsung was the sixth-largest smartphone manufacturer in China. At the end of June, there were 48 million Samsung-branded smartphones in use in China. Rival Apple managed to grab the top spot with 171 million iPhones in the same period.

Chinese smartphone manufacturers grabbed all the places in between Apple and Samsung. Huawei, with 132 million handsets, was in second place, followed by Oppo (124 million), Vivo (108 million) and Xiaomi (68 million) at third, fourth and fifth places, respectively. Samsung actually dropped a few places in the first half of the year, with Chinese buyers opting for affordable smartphones from local manufacturers. The Note 7 debacle could also have also contributed to the drop.

In the second quarter, almost 63% of the handsets sold in China were priced below 2,000 yuan (about $300). On the other hand, phones costing more than 4000 yuan (about $600) accounted for only 6.4% of the sales during the quarter, and iPhones formed the majority of the handsets in the segment. A report from Counterpoint in April also noted the same thing:

“Apple’s share of this super-premium segment remains at 80 percent, with five out of the top ten model SKUs belonging to Apple.”

In addition, the KITA report indicated that Chinese brands were more popular among younger consumers. Almost half of Oppo’s sales came from buyers aged between 16 and 25. An important finding of the report was that only 25% of Oppo and Vivo buyers chose the same brand as their next device, while more than 50% of iPhone owners chose to stick with the brand. For Samsung, this number was very dismal at just 7.2%.

Apple and Samsung have a unique relationship

In China, the Korean firm has had a poor track record for the last couple of years, but when it comes to the global market, Samsung held the top position in the second quarter. According to Strategy Analytics, Samsung shipped 89 million phones in the April-June period, grabbing 20.5% of the global market. However, when it comes to profit margin on phones, Apple and Samsung are at two extreme ends, where Samsung makes less than a fifth of the profits that Apple earns from iPhones.

The KITA report noted that Samsung has not been able to keep pace with Apple since the launch of the iPhone 6. This forced the Korean firm to focus on Apple as a customer of its chips, displays and memory units instead of a rival in the smartphone segment, and this strategy has really helped.

KGI Securities analyst Ming-Chi Kuo noted in a recent report that Apple now is very dependant on Samsung as a supplier, at least when it comes to OLED displays.

“OLED iPhone panel supply is controlled wholly by Samsung, not Apple,” and this gives the Korean firm more bargaining power, the analyst said. “This is also why Apple is in urgent need of finding a second source of OLED.”

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Aman Jain
Personal Finance Writer

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