Samsung Electronics’ market share in China is on the decline as the rapidly growing Chinese market is cooling down.
Analysts say Korean tech firms need new export strategies such as turning their eyes to other markets including rising India.
Smartphone shipments in China dropped 4.3 percent to 98.8 million units in the first quarter from the same period of a year earlier, according to data released by an American market research firm IDC. The drop is the first time in six years.
IDC said, “As the smartphone penetration rate reaches 90 percent in the Chinese market, the smartphone market is already mature like other advanced nations such as the U.S. the U.K, Australia and Japan.”
Experts say that it is time for local tech giants like Samsung Electronics and LG Electronics to shift their export strategies. Samsung, which was ranked top in terms of market shares in China in the first quarter of last year, dropped to fourth in the same period of this year. Its sales dropped by 50 percent to 9.6 million unit, compared with a year earlier.
Apple was ranked the first in the first quarter of this year, by selling 14.5 million units, up 62 percent from the same period of last year. Xiaomi followed with 13.5 million units and Huawei with 11.3 million unit.
Market watchers said the breakthrough of Apple in the market is due to its focus on premium brand.
Charles Lin, CFO of Pegatron, Apple’s subcontractor, said, “China’s smartphone market has been divided into high-end smartphones like iPhones and low-end phones. The mid-end smartphones will struggle further down the road.”
Samsung also admitted that, “Despite the slow growth of the smartphone market, the demand of high-end smartphone is expected to grow as around 88.5 million Chinese smartphone users are using low-end smartphones.”
Xiaomi, Chinese low-end smartphone maker is also seeking high-end market by high-priced smartphone “Mi Note Pro.”
Regarding Apple’s success in the market, its chief Tim Cook recently said, “iPhones are selling more in the Chinese market than in the U.S. market.”
Apple also hopes to unveil its mobile payment system in China, and is reportedly in discussion with Chinese largest e-commerce company Alibaba Group.
Experts said Samsung should turn its eyes to new markets such as India where other rivals including Apple, Xiaomi and Huawei are all keeping an eye on. In India, feature phones still account for around 65 percent. Global tech giants will face fiercer competition in the market down the road.
By Monica Yeun-soo Chung (monica@koreaittimes.com)
