According to a new Gartner study, Apple and Samsung are losing smartphone market share to Huawei because customers aren’t keen on the incredibly high price tags of premium iPhone and Galaxy models.
The February 21st report says phone manufacturers like Huawei and Xiaomi are putting out midtier phones that continue to “grab more market share.”
Even though Samsung and Apple still hold 17.3 percent and 15.8 percent of the market, earning them the top two spots in Q4 2018, it’s evident that Huawei is quickly topping the ranks to knock the two companies down.
At the end of last year, Huawei captured 14.8 percent of the market, climbing four percentage points from the same time period a year ago.
In comparison, both Samsung and Apple dropped in market share value by one percent and four percent, respectively.
“Demand for entry-level and midprice smartphones remained strong across markets, but demand for high-end phones continued to slow in the fourth quarter of 2018,” Anshul Gupta, senior research director at Gartner, said in the report. “Slowing incremental innovation at the high end, coupled with price increases, deterred replacement decisions for high-end smartphones. This led to a flat-growth market in the fourth quarter of 2018.”
In its Q1 2019 results, Apple reported its revenue fell to $84.3 billion USD ($111 billion CAD), a five percent decline from what was reported in the same period a year earlier. In iPhone sales, it only earned $52 billion USD ($69 million CAD) in Q1 2019, compared to $61.1 billion ($81 billion CAD) in Q1 2018.
“Apple has to deal not only with buyers delaying upgrades as they wait for more innovative smartphones, but it also continues to face compelling high-price and midprice smartphone alternatives from Chinese vendors. Both these challenges limit Apple’s unit sales growth prospects,” Gupta said.
Samsung also reported an operating profit decline of 29 percent year-over-year in its Q4 2018 earnings.
It blamed lower overall demand for smartphones as a reason for the downturn.
Gupta said that while Samsung launched its M Series smartphones in the first quarter of 2019, it still “continues to face growing competition from Chinese brands that are expanding into more markets.”
“It also faces difficulty bringing significant innovation to high-end smartphones,” Gupta said.
It’s important to note that the M Series is exclusive to China and India.