It’s no secret that the smartphone market is a brutally cutthroat one, but it’s generally assumed that smartphone makers take a roughly equitable — if disproportional — share of profits. That assumption, however, appears to be far from the truth, as Samsung continues to dominate the global smartphone market. Despite the strong results of Apple’s second quarter and iPhone sales that reached 41 million for the period, Apple is still in the shadow of Samsung when it comes to global phone sales. The reason for Samsung’s success is largely sales of its new Galaxy S8 family.
Global smartphone shipments rose 6% year over previous year in the second quarter to 360 million units. Much of the improvement was due to a growing market for smartphones in Africa and people who have decided to upgrade from older smartphones.
Samsung shipped 79.5 million units, up from 77.6 million in the same period of 2016. Apple shipped 41.0 million, roughly in line with the number given in its earnings report. This was up from 40.4 million last year. This put Samsung’s global market share at 22.1% to Apple’s 11.4%
The growth in the industry was due to particularly strong results from China’s three smartphone giants. Huawei shipments hit 38.4 million, very close to Apple’s total, up from 32.0 million in the second quarter last year. OPPO shipments reached 29.5 million, up from 18.0 million last year. Xiaomi’s shipments hit 23.3 million, up from 14.7 million last year. All three companies have struggled to sell phones outside their home market of China, although Huawei has started to break free from that problem.
The Chinese companies cannot rely strictly on the home market for improvement, despite the fact that it is the largest in the world. None has a major presence in the United States, and only modest sales in Japan and the European Union.
Apple’s problem is opposite that of China’s Big Three. Sales of iPhones in China have continued to fall. In its second-quarter earnings report, Apple disclosed that iPhone sales in its “Greater China” region where 8 million, down 10% compared to the same quarter last year and 25% from the immediately previous quarter. CEO Tim Cook has indicated several times that China is absolutely critical to Apple’s success because of its massive consumer base. Apple recently shook up its China management, installing a new managing director to oversee the region.
The perception that the iPhone 7 has vaulted Apple ahead of Samsung is wrong. Based on Samsung’s huge lead globally, even the iPhone 8 may realistically not change that.