Last year was a momentous one for Samsung, who grew to amass a larger market share than Apple and emerge as the dominant smartphone brand. This started during the first quarter of 2017, when Samsung began to sell considerably more units than Apple while their flagship devices performed far better.
However, the big story from last year was the emerging presence of Chinese handsets, which have come dominate the Asian marketplace and outsell brands like Samsung, Apple and LG.
In this post, we’ll ask why this is the case, and ask what makes the Asian market so unique?
How Chinese Brands Overtook Samsung to Corner Asia
To provide some context, Samsung has been established as the long-standing market leader in Southern Asia. Despite its stellar 2017, however, the brand struggled to retain its dominance in this particular regions, with a number of Chinese brands effectively cornering emerging economies such as Malaysia, Indonesia, the Philippines and Thailand.
Led by Oppo, Vivo and flagship brand Huawei, Chinese manufacturers shipped a cumulative total of 29.7 million smartphones across these regions last year. This contributed to a 29.6% market share, placing it marginally ahead of Samsung on 29.1%.
So, while Samsung remains the bestselling brand in Asia and managed to sell 29.3 million smartphones into the region last year, it has been unable to resist the overtures of their increasingly competitive Chinese rivals.
There are a couple of reasons for this. Firstly, the domestic market in China declined recently in recent times, encouraging brands to extend into the surrounding reasons and create a globalises consumer base.
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Secondly, the reduced manufacturing costs of Chinese smartphones continues to translate into lower price points, without compromising on the quality or functionality of handsets. This is creating a value proposition that’s hard to ignore, particularly in traditionally poorer regions and a strained economic climate.
So Why is the Asian Market so Unique?
Given this and the wider geopolitical climate, it would not be a surprise if Chinese smartphones also increased the market share in Europe and beyond.
Remember, estimates suggest that the iPhone X cost Apple around $389.50 to make per unit, where Huawei’s latest flagship device delivered manufacturing costs less than half of this value.
Not only this, but Chinese brands also focus on selling on volume rather than optimising bottom line profit margins, enabling them to offer increasingly competitive prices that extremely appealing in an age of premium (but costly) handsets.
The Last Word
While it appears as though the smartphone market is heading in a clear and ultimately logical direction, the burgeoning trade war between China, the U.S. and a host of other regions could yet disrupt this course.
After all, China and America have already seen their currencies fluctuate amid the initial implementation of tariffs, as anyone who has a forex trading demo account can testify. With company stocks also vulnerable to depreciation, smartphone brands such as Apple and Huawei could feel the pinch as 2018 progresses.
This is speculation for now, of course, and as it stands there’s little doubt that Chinese smartphone manufacturers becoming increasingly dominant on the global stage
