The last couple of years haven’t been so easy for Samsung, as the company has been facing fierce competition from all sides, resulting in falling profits quarter after quarter and a huge loss on its market value. Although they are by far the biggest phone makers in the world with the largest market share on smartphone global brands, with about 1/4 of all devices, a new report from global provider of market intelligence TrendForce indicates that the company is about to see a slight drop in annual shipments, which is going to be their first drop yet. The numbers are not that alarming yet, as shipments are expected to fall by 1% on a year-over-year basis. Given that, Samsung will ship around 323.5 million units in 2015, with a 25% market share, Apple comes in the second place, followed by Huawei, Xiaomi and Lenovo. While Samsung suffers this 1% drop, Huawei is set to be the biggest winner with a 40% growth year-over-year.
Although the drop is small, it may have some huge reflections in the future. There are several reasons for this to be happening now and the main ones are Apple, Xiaomi and other small Chinese manufacturers. High-end smartphones is where the company should be making money, since they have high price tags and profit margins, and Apple is eating it all with the iPhone. As the Cupertino-based company entered China, their sales have been growing like rabbits there, and it won’t slow down for a while. To make things worse, Samsung’s own flagship phones had lower-than-expected sales, forcing the company to lower the prices to boost it. Now we go to the mid-range market, where Samsung sells to the masses. Xiaomi and other smaller Chinese makers are eating it all, forcing Samsung out of the top-five market in China and bringing fierce competition to India, which is also a huge market and is set to surpass the United States as the second largest smartphone market by 2016.
Things are not lost yet, as the company has a rock solid structure and they are still the largest phone maker in the world with about 1/4 of the market share for smartphones. Additionally, for Q3 2015, they are expected to see their first quarterly profit growth in 2 years, a 80% increase when compared with Q3 2014. However, this new scenario presents higher challenges for Samsung, as neither Apple, Xiaomi, Huawei and the rest of the competition won’t stop what they have been doing.