According to new research by Asia-based Counterpoint Technology Market Research, Apple sold more than 20 million iPhone units in November of 2014, shortly after it rolled out the iPhone 6 and 6 Plus with bigger screens. It now has over 51 percent market share in Japan and one-third in Samsung’s home market of Korea.
“No foreign brand has gone beyond the 20 percent market share mark in the history of Korea’s smartphone industry. It has always been dominated by the global smartphone leader, Samsung. But iPhone 6 and 6 Plus have made a difference here, denting the competition’s phablet sales,” says Counterpoint’s research director Tom Kang.
For ACI research director Ed Zabitsky, Apple’s move to satisfy the demand for larger displays was a no-brainer.
“Talk about being behind the market. It’s been more about screen size than anything. This is a big upgrade.” He believes Apple blatantly copied the phablet from Samsung and did well doing it.
“They have been actively copying from each other for years. But nobody takes a feature seriously until Apple uses it.”
Samsung pioneered the phablet market with the Galaxy Note, ushering in its dominance as the world smartphone leader. “There are a lot of consumers that have never had a chance to use Apple with bigger screens. People who would have chosen Apple but didn’t because they didn’t have the right feature.”
Samsung Hit
Samsung, which still has 24 percent of the global market according to research by IDC as of Q3 of 2014, is taking a hit and not just from Apple. Comparable data from IDC for November is not out yet.
It said in January that it expects operating profit for the last quarter of 2014 to fall by 37 percent. The profit margin for its mobile division went from almost 20 percent at the beginning of the year to 7.1 percent in the third quarter of 2014.
This is probably why Samsung leaked the news that it would announce two new versions of the Galaxy S6 at the Mobile World Congress in Barcelona in the beginning of March this year.
According to Zabitsky, it’s the nature of the Chinese competition that is providing a blow from below on top of Apple’s move in the high-end phablet space.
“It’s really the high-end Android smartphone space as opposed to phablets. There are Chinese brands like Lenovo and Xiaomi. They were going to take market share from everyone. But they first took away from Android, which is Samsung.” Both of the Chinese manufacturers run Android and are therefore direct competitors of Samsung.
“They are willing to live with very low gross margins. Lenovo is a PC company. And Xiaomi thinks like a contract manufacturer; their margins are so thin. Now Xiaomi is trying to get the luxury end of the market but they are not there yet. At this moment, the headway that Xiaomi is making is at Samsung’s expense but they are not the only one.”
