Microsoft Loses Global No. 3 Mobile Phone Vendor Spot to Huawei

Huawei shipped 30.6 million mobile phones in the second quarter of 2015, compared with the 27.8 million Microsoft's Lumia division shipped.

Huawei, Strategy Analytics, Microsoft, Lumia, smartphones, mobile phones, Apple, Samsung

Chinese mobile phone vendor Huawei Technologies has just eclipsed Microsoft's Lumia division to take over the number three spot globally in mobile phone shipments, according to new research from analyst firm Strategy Analytics.

Overall, the world's mobile phone shipments grew by a "lackluster" 2 percent to 434.6 million devices in the second quarter from 428 million units in the same quarter one year ago, according to the research firm.

What was striking in the latest report, according to Strategy Analytics analyst Ken Hyers, is that Huawei sold 30.6 million phones and captured 7 percent of the global market in the second quarter, a record for the company. Microsoft's Lumia division shipped 27.8 million phones during the quarter, down from 50.3 million in the same quarter a year ago. Microsoft's market share in the latest quarter fell to 6.4 percent, down from 11.8 percent for the same period a year ago. That's near an all-time low for Microsoft, according to Strategy Analytics.

"Huawei is rising fast in all regions of the world, particularly China, where its 4G models, such as the Mate7, are proving wildly popular," Hyers said in a statement. "Huawei has finally overtaken Microsoft to become the world's third largest mobile phone vendor for the first time ever."

Smartphones accounted for eight out of 10 mobile phones shipped during the quarter, the company said. The 2 percent growth rate of the overall mobile phone market is the industry's weakest performance for two years due to slowing demand for handsets in China, Europe and the United States.

Perennial global mobile phone market leader Samsung continued to stay in the number one spot in the rankings with 89 million phones shipped and 20.5 percent of the market share for the second quarter, but both figures are down from 95.3 million phones shipped and 22.3 percent market share one year ago, according to the Strategy Analytics figures.

Apple remained in the second spot, with 47.5 million phones shipped and a 10.9 percent market share in the second quarter, up from 35.2 million phones shipped and an 8.2 percent market share for the same period last year.

"Samsung has stabilized volumes in the high-end, but its lower-tier mobile phones continue to face intense competition from rivals such as Huawei in Asia," Strategy Analytics analyst Neil Mawston said in a statement. "Apple grew 35 percent annually and shipped 47.5 million mobile phones for 11 percent worldwide market share in the second quarter. Apple outperformed as consumers in China and elsewhere upgraded to bigger-screen iPhone 6 and 6 Plus models."

Mobile phone vendor Xiaomi was fifth on the list, shipping 19.8 million phones and capturing 5 percent of the worldwide market share in the latest quarter.

Samsung is still trying to figure out how to continue to hold its shrinking lead in the global smartphone market in a competitive atmosphere that has seemingly placed a target on Samsung's corporate back. In its second-quarter earnings report, released July 30, Samsung's revenue fell 7 percent to $41 billion from $44.5 billion one year ago, and net profit dropped 8 percent to $4.9 billion from $5.3 billion in the second quarter of 2014.

The company's mobile products revenue, which includes smartphones, fell 6.86 percent in the second quarter to $21.7 billion, down from $23.3 billion one year ago. Samsung does not break out individual numbers for its smartphone and tablets sales. The mobile products unit's operating profit of $2.36 billion fell 37.6 percent from $3.79 billion for the same period one year ago.

The news was tough again for Samsung, which has been hit by a string of disappointing earnings reports for some time now as its chief competitor, Apple, continues to rake in huge revenue and profits from its iPhone 6 and 6 Plus smartphones. In April, Samsung released its latest flagship smartphones, the Galaxy S6 and Galaxy S6 Edge, to battle back against the iPhon6 and 6 Plus, which came out in September 2014.

Apple, meanwhile, reported $10.7 billion in net profit on revenue of $49.6 billion in the third quarter of 2015 ended June 30, compared with the $7.7 billion in net profit and $37.4 billion in revenue the company brought in during the same quarter one year ago. Although that sounds positive, those numbers are down from the company's 2015 second quarter, when it posted $13.6 billion in net profits and $58 billion in revenue.

Editor's Note: This article was corrected to reflect that Huawei Technologies is a Chinese mobile device maker.