Samsung’s smartphone sales growth to decline further this year

By Rik Ray | Updated on 15-Oct-2015

15-Oct-2015

HIGHLIGHTS

Shrinking market share in low and mid-range categories will contribute to the decline, with Huawei gaining considerable momentum

Samsung’s smartphone sales growth has been on the decline for a while, and according to market research firm TrendForce, it will turn negative this year. However, the South Korean company will continue to remain the top smartphone manufacturer in the world in terms of sales volume.

According to the report, Samsung’s smartphones comprised approximately 25 percent of the total smartphones shipped in the third quarter of this year. TrendForce has predicted a 1 percent year-on-year dip in smartphone sales for the company in 2015. The projected slump has been attributed to the weakening market share in the lower and middle segments. Samsung has been losing ground to Chinese competitors like Xiaomi and Huawei in these segments. While in India, it also has to contend with Micromax. The company is expected to sell 323.5 million units in 2015. It is estimated to sell 40 million units of the Galaxy S series smartphones and 10 million units of the Note 5 flagship by the end of this year.

While Samsung’s sales are flagging, Apple is on course to achieve a 16 percent growth over last year’s figures. TrendForce has predicted Apple to ship 223.7 million units this year. The 3D Touch technology introduced on the iPhone 6S and 6S Plus is major factor that is expected to drive the sales of the new devices. The report also notes that Huawei has surpassed this year’s target of 100 million shipments in the third quarter itself. In the process it has become the third largest smartphone manufacturer in the world. The Nexus 6P is certain to boost the company’s profile among the Android faithful and will help it to reach out to a wider audience.

A one percent decline in sales may not ring alarm bells at Samsung, but the company certainly needs to come up with a strategy to stem it. “Emerging markets such as South-east Asia and India are now the major battlegrounds for vendors as developed markets have become fairly saturated. Increasing competition also means profits will fall inspite of steady shipments, and this will be the primary issue that most vendors will have to deal with in the near future,” the report said.

Source: TrendForce