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The global smartphone wars are taking on an interesting new look, as Chinese upstarts like Huawei, Alcatel, ZTE and Xiaomi continue to chalk up sales around the world, and even begin appearing consistently on top sales lists in countries in Europe and Asia.
It’s a trend that’s surfacing more broadly, according to analysts with Gartner, Strategy Analytics and Kantar Worldpanel, and the patterns are continuing as the companies are bringing out products that compete evenly with flagship models from global market leaders Samsung and Apple.
New Gartner global smartphone sales figures for the first quarter of 2016 show Samsung continuing to lead the world with 81.2 million phones sold for a 23.2 percent market share, followed by Apple with 51.6 million iPhones sold for a 14.8 percent share, according to a May 19 announcement. But Samsung’s sales were essentially flat compared to the first quarter of 2015 when it sold 81.1 million smartphones for a 24.1 percent market share, and sales were down substantially for Apple from last year’s first quarter, when it sold 60.2 million iPhones and had a 17.9 percent market share.
Meanwhile, Huawei had a banner first quarter in 2016, with sales of 28.8 million smartphones, compared to 18.1 million handsets in the same quarter one year prior. Huawei’s market share rose to 8.3 percent in the latest quarter from 5.4 percent a year earlier.
“In Q3 2015, they really saw their sales jumping,” Gartner analyst Anshul Gupta told eWEEK. What’s happening, he said, is that while the U.S. smartphone market continues to be saturated, the slack is being made up in other parts of the world where smartphones are still being purchased in growing numbers, and that is allowing several Chinese vendors that make quality products at competitive prices see their global sales take flight.
“U.S. smartphone sales make up about 12 percent of global sales today, and that’s getting lower because the overall market is expanding elsewhere,” said Gupta. “This is letting other players in who may not have a large presence in the U.S. gain market share.”
The changes are not unexpected, said Gupta. “That is what I said two or three years back, that among the smartphone players in the next few years that there would be three Chinese players among the leaders in the global market and that a Chinese company would take the No. 1 sales spot in China.”
That’s exactly what has happened. Huawei took over the top spot in China from Samsung, Chinese vendor Oppo took over the second spot there, and Xiaomi came in third, Gupta said. “The Chinese brands are getting stronger, not only dominant in their home market, but they are expanding in other regions, too,” over the last two years.
In the first quarter of 2016, Samsung moved down to sixth on the sales list in China, compared to being in fourth place in the year-earlier quarter, according to Gartner.
On the global smartphone sales rankings for the first quarter, Oppo is in fourth place with a 4.6 percent market share, followed by Xiaomi with a 4.3 percent market share, according to Gartner. Both companies were new to the list, knocking off Lenovo and LG from their previous spots in the top five global rankings, said Gupta.
Lauren Guenveur, a mobile analyst with Kantar Worldpanel ComTech, told eWEEK that she is also seeing Huawei make sales gains in countries like Germany, where it captured 11.6 percent of the market in the first quarter, up 6.4 percent from a year earlier; in Italy, where it captured 18.6 percent in the latest quarter, up 12.5 percent from a year earlier; and in Spain, where Huawei captured 19.6 percent of the market in the first quarter, up 11.8 percent.
At the same, she said she’s not sure that Huawei will ever be able to have those same kinds of sales successes in the United States, where consumers “remain very focused on the premium tier” of devices from companies like Apple and Samsung.
“Unless Huawei can come up with something revolutionary in the sense that it’s more like an iPhone or Samsung device, then I don’t see how they are going to capture a bigger market share in the U.S.,” she said.
Huawei, Other Chinese Smartphone Vendors See Sales Gains
Another analyst, Linda Sui of Strategy Analytics, told eWEEK that her first-quarter data shows Huawei increasing its U.S. smartphone shipments, but not at the expense of Samsung or Apple. Instead, Huawei is gaining U.S. market share at the expense of Tier 2 vendors, including BlackBerry and Microsoft, she said.
In the U.S. smartphone market, Huawei is in the ninth spot, compared to No. 1 for Apple and No. 2 for Samsung. Apple had 32 percent of first-quarter shipments, compared to Samsung at 28 percent. LG was third with 17 percent, followed by ZTE with 7 percent and Chinese vendor Blu with 4 percent.
While Huawei is threatening Samsung and Apple for market share in other countries, the company faces longer odds to try to replicate that feat in the U.S. market, Sui said.
“It will not happen in the short term,” she said. “It is difficult” due to the politics between the two nations and because of resistance from some U.S. carriers toward unlocked phones, which prevent long-term lock-in for customers.
Interestingly, Zhiqiang Xu, president of Huawei Device USA, made a bold prediction back in June 2015 at a Huawei press event in New York City. At the meeting, he said that in the next five years his company would “reach the position as a top-three player in the U.S. smartphone market,” according to an earlier eWEEK story. The world is still waiting to see how this prediction will turn out.
In April, Huawei launched its latest flagship phones, the P9 and the larger P9 Plus, in markets around the globe, but not yet in the United States. The handsets feature new dual-lens cameras, long battery life, and biometric fingerprint readers for security and privacy.
The P9 and P9 Plus handsets are built using aerospace-quality aluminum bodies with rounded, diamond-cut edges for high style. The P9 has a 5.2-inch Full HD 1080p touch-screen display and is powered by a Kirin 955 2.5GHz 64-bit ARM-based processor, while the P9 Plus has a 5.5-inch Full HD touch-screen display and the same Kirin CPU. The P9 is fitted with a 3,000mAh high-density battery, while the P9 Plus uses a larger 3,400mAh battery.