Samsung and Apple may be the world's biggest smartphone makers, but other vendors are catching up fast. Gunning for third place is Chinese smartphone maker Xiaomi, which was established just three years ago; and also Lenovo, which just announced the completed sale of Motorola Mobility from Google.
Data from research firm Strategy Analytics shows that while Samsung and Apple still dominate the smartphone industry, Xiaomi is clearly the star of the show. Samsung is still leading the pack with 24.7 percent of the market share in the last quarter, but the Korean smartphone maker's market share dropped from the 35 percent it enjoyed during the same period last year. This follows after Samsung also posted a steep profit decline for the third fiscal quarter, citing stiff competition from Chinese smartphone makers as the result of its declining mobile business. Apple, too, isn't safe from the competition, slipping down a less steep incline with 12.3 percent market share. Last year, Apple had 13.4 percent of the worldwide market.
Xiaomi comes in third with 5.6 percent, a far cry from Apple's 12.3 percent and Samsung's 24.7 percent. However, Xiaomi is the only smartphone vendor to post a triple-digit growth in shipments from last year, when it owned only 2.1 percent of the market share. Earlier this year, research firm Canalys said Xiaomi overtook Samsung as the biggest smartphone maker in China.
Figures from IDC confirm Strategy Analytics' numbers, with Samsung market share dropping 8.7 percentage points to 23.8 percent and Apple's previous 12.9 percent dipping slightly to 12 percent. Xiaomi comes in third with 5.3 percent of the market share, while Lenovo and LG trail closely behind with 5.2 percent and 5.1 percent respectively.
"Samsung continues to face tough competition from Apple at the higher-end of the smartphone market, from Xiaomi and Huawei in the middle-tiers, and from Lenovo and others at the entry-level," says Neil Mawston, executive director at Strategy Analytics.
Beijing-based Xiaomi, whose name means "Little Rice" in Chinese, has seen explosive growth since it was established in 2010 for marketing affordable Android smartphones packed with premium features. Its Mi 4 flagship, which has specs matching that of its more expensive counterparts, has received positive reviews from many enthusiasts. It also undercuts the competition with a price that is around half of other smartphones in the same specs range. Last year, Xiaomi hired former Android executive Hugo Barra to spearhead the company's expansion into India, Singapore, Taiwan, Hong Kong and Malaysia.
The race is far from over. The smartphone market continues to expand with more than 327 million units sold in the third-quarter, a figure more than 8 percent than the same period last year. Just eight hours after Strategy Analytics' report, Lenovo announced the completion of its $2.91 billion deal with Google's Motorola Mobility, giving it a combined 8 percent of the global market share, says Lenovo and Strategy Analytics. Kiranjeet Kaur, analyst at IDC, agrees.
"Lenovo will be number three in the global smartphone market, but definitely we will not stop here," says Lenovo CEO Yang Yuanqing. "We want to become the leader in the smartphone and mobile devices area."
However, Apple remains to be the only profitable smartphone business as other vendors struggle to make money in the highly competitive smartphone market.
