As the smartphone market continues to move away from higher-end products and is clearly now turning its attention to lower-end devices, particularly in emerging markets, perhaps Samsung's 1 percent decline in revenues within its mobile and networks division for Q1, 2014 isn't so shocking.
However, when you consider the dip is the first such on the mobile side of their business in over four years, it is certainly raising some eyebrows around the globe.
According to research group Strategy Analytics, Samsung's share of global sales in Q1, 2014, as compared to a year ago, dipped from 32.4 percent to 31.2 percent. While Samsung's share was down, rival Apple's profit numbers were up 7 percent, though market share numbers were down to 15 percent from 17 percent in Q1, 2013.
Both of the world's largest smartphone makers are feeling the heat from the aforementioned shift in the market to lower-end devices. The Strategy Analytics report added the combined global smartphone market share of Samsung and Apple has slipped from 50 percent in Q1 2013 to 47 percent in Q1 2014.
The report also notes the increased competition from the second-tier smartphone brands such as Huawei, which remained steady with 5 percent global smartphone market share in Q1 2014, and LENOVO which has increased its global presence from 4 percent to 5 percent share during the past year.
An earlier Frost & Sullivan report on the smartphone market discussed the keys to success for manufacturers as this category matures will continue to be all about differentiation and less about features. Some of these second-tier makers like HTC, Huawei and ZTE will continue to make inroads with unique design specs and lower-end price points.
Researchers believe a lack of presence in the entry-level category will ultimately hurt both Samsung and Apple moving forward so it will be interesting to see what both vendors do to address this bump in the road. Many observers predict price will continue to become a critical selling point in this space, while innovation, they claim, could slow down significantly in the years ahead.
