Samsung, Apple Inc. Market Share To Decline: Fitch

Samsung, Apple Inc. Market Share To Decline: Fitch
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Ratings agency Fitch says that Apple Inc. NASDAQ:AAPL and Samsung Electronics Co. Ltd. LON:BC94 KRX:0059935’s days of dominating the global smartphone market are over. In their press release Tuesday, Fitch points out that the world’s dominant smartphone brands are already starting to lose market share to low-end emerging-market competitors, and that the trend is almost inevitably going to continue to gain steam.

In specific, Fitch projects that Apple and Samsung’s combined smartphone shipment volume will hold steady around 450 million to 460 million units in 2014 (compared to 467 million units in 2013), even though the global smartphone market will increase by at least 20% to around 1.2 billion units.

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Projected market share losses for Apple and Samsung

The ratings agency projects Apple Inc. NASDAQ:AAPL will lose around a fifth of its global market share within the next 12 months, dropping to a 25% share of smartphone sales from 31% in 2013.

Korean giant Samsung is also likely to see its market share drop to 14 per cent from 15% by August 2015, Fitch predicted. Other analysts note that Samsung, unlike Apple Inc. NASDAQ:AAPL, has made some efforts at developing less expensive phones aimed at emerging market consumers.

“We expect the big two’s combined smartphone shipment volume to stagnate at around 450 million-460 million units in 2014 [down from 467 million in 2013], even as the global smartphone market rises by around 20 per cent to 1.2 billion,” Fitch said in its statement.

Saturation of developed markets

The smartphone market in the developed world is clearly saturated, which means the only way to significantly grow device sales is in emerging markets. That, however, is easier said than done.

Fitch points out that smartphones represent around two-thirds of the global handset market, and that “growth will come largely from emerging markets.” The Fitch analysts highlight that India and China together are expected to account for more than 60% of the growth in total smartphone volumes.

The ratings agency highlights local handset makers such as China’s Xiaomi, Lenovo Group Limited and Huawei Technology Co Ltd, as well as India’s Micromax Informatics as the major regional competitors for Apple Inc. NASDAQ:AAPL and Samsung.

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