The global smartphone market in 2018 is dominated by two giants: Samsung and Apple. Both companies ended the year 2017 with two successful products, namely iPhone X from Apple and Samsung Galaxy S8 from Samsung. However, their duopoly in the market is threatened by large Chinese manufacturers such as Xiaomi and Huawei. As of June 2018, Samsung is an ultimate global leader in the smartphone market holding a 31% market share according to GlobalStats.
Apple & Samsung
Apple has a smaller share of the market amounting to 19% but together the Samsung & Apple control 50% of the smartphone market. Even though Xiaomi and Huawei demonstrated high growth rates in 2017-2018, their market share is still significantly smaller in the global arena. Both companies account for roughly 7% of the market each. However, they have already earned a high market share in Asia where Xiaomi and Huawei together account for 16.31%, more than Apple’s share in this region according to estimates from GlobalStats. In fact, the regional leadership of the two major smartphone brands varies greatly across the world.
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Apple vs. Samsung
Apple holds a dominant position in North America and Oceania where almost half of all smartphones sold are Apple products. Samsung accounts for roughly a quarter of the market in these two regions. However, in Europe, Asia, South America, and Africa, Samsung dominates by a large margin. It can also be predicted that by the end of 2018, Samsung will gain a more higher share of the market due to its recent release of Samsung Galaxy S9 & Galaxy Note 9.
While Samsung is now capitalizing on its brand new model, Apple revealed only vague plans to launch three new iPhones this year, which could be simply extensions of the existing models such as iPhone X Plus. However, Apple may also surprise the market by revealing a brand new iPhone but it is very unlikely that the launch will take place anywhere before September or even October based on the previous schedule of Apple releases.
Apple vs. Samsung vs. Others
Even though Apple and Samsung are expected to have their rivalry throughout 2018, why would one expect that Huawei and Xiaomi would soon dethrone them from this leadership? After all, the Chinese brands compete in quite different segments of the market. While Apple and Samsung have strong positions in the high-end market, Xiaomi and Huawei are mostly in the more budget market niches.
Yet, this has changed. With the recent release of Huawei P20 Pro and Honor 10, the Chinese manufacturers are testing the high-end market. The companies started making products that sell for almost the same price as high-end Samsung and Apple smartphones. In addition to this, they have a large assortment of low end and mid-end products that companies such as Apple do not have. So, the market strategies and business models of these companies are different and it is only a matter of time when new leaders will replace the old leaders.
Global Smartphone Market in 2018
In spite of the reported decline in total sales of all smartphones in 2018, the market remains very competitive and growth is expected to be reinforced by the end of the year, soon after the release of new smartphones from top leaders in autumn. The recent decline in smartphone sales was predominantly due to saturation of the market in China, a leading consumer of smartphones. At the same time, other regions such as North America demonstrated growth.
The current leading position of Apple in the North American market is explained by a number of barriers that exist for Xiaomi and Huawei to successfully enter the market. However, these Chinese brands have already shown a successful expansion in Europe and this expansion is expected to continue as Xiaomi signs a contract with Three UK. This will greatly threaten the positions of both Apple and Samsung in the European market.
Recent growth rates of Xiaomi are also impressive. According to Gartner, the company managed to increase its worldwide sales by 124% in one year from 2017 to 2018. Regional growth rates are even more impressive as Xiaomi reported a growth of sales by 330% in the Asian-Pacific region.
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Final Words
In conclusion, even though the growth of the new Chinese smartphone producers and their expansion strategies threaten the positions of Samsung and Apple, the leadership will still be held by Samsung in 2018. This will be for several reasons. First, the company controls almost one-third of the global smartphone market and the closest competitors lag behind by a significant margin. Second, Samsung has recently launched successful Galaxy S9 and Galaxy S9+ that gives the company a further competitive advantage in the short run. Finally, Chinese brands have unresolved barriers to successful entry in the North American market where both Samsung and Apple already reap rewards. If the situation in leadership changes, it will happen no sooner than a few years from now.
This article is written by Anna Clarke. She is the owner of online writing company 15 Writers. She is a successful entrepreneur with over 20 years’ experience in both freelancing and academic writing industries, specializing in Business, Economics, Finance, Marketing, and Management. Follow her on Twitter.
