IDC: Chinese smartphone vendors challenge Samsung, Apple

IDC predicted quarterly smartphone shipments will break the 300 million unit mark for the first time in the third quarter of 2014, following strong growth in the April to June period.

The research company said shipments hit a record 295.3 million units in the second quarter, up 23.1 per cent on the same period of 2013 and 2.6 per cent versus the first quarter of 2014. Shipment growth was fuelled by strong demand for mobile computing and growing availability of low-cost smartphones, the company noted.

Samsung and Apple remained the market leaders during the quarter, with shipments of 74.3 million and 35.1 million units respectively. However, IDC said the overall market growth was driven by local vendors in emerging markets. Chinese OEMs were particularly strong during the period with shipment growth that outpaced the market.

IDC said Huawei led the Chinese vendor charge in the second quarter, with shipments of 20.3 million units nearly double the number it shipped in the second quarter of 2013. Domestic rival Lenovo also put in a strong performance in the recent quarter, with shipments of 15.8 million units enough to give the firm a 5.4 per cent share of the market.

"As the death of the feature phone approaches more rapidly than before, it is the Chinese vendors that are ready to usher emerging market consumers into smartphones," said IDC senior research manager Melissa Chau.

The list of top five vendors is likely to be shaken up in the third quarter, said IDC program director Ryan Reith. "Right now we have more than a dozen vendors that are capable of landing in the top 5 next quarter. A handful of these companies are currently operating in a single country, but no one should mistake that for complacency--they all recognise the opportunity that lies outside their home turf."

Amazon, however, is not likely to grab a large share of the smartphone market, according to a separate report by research company IHS.

While the company's teardown analysis of Amazon's Fire smartphone reveals it should turn a tidy profit on each unit--it costs $205 (€153) to produce compared to an unsubsidised retail price of $650--analysts are concerned that Amazon is pitching itself into direct competition with Samsung and Apple in the high-end of the smartphone market.

"This is a high-risk launch-price strategy which is unsustainable for a smartphone market entrant like Amazon," said Ian Fogg, senior director for mobile media at IHS.

For more:
- read IDC's press release
- see this IHS teardown report

Related Articles:
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Microsoft lifts lid on sub-€100 Lumia smartphone
Amazon fails to set world on Fire with first smartphone
IHS: Samsung S5 costs more to build than S4 and iPhone 5s
Gartner: Smartphones outsell feature phones in 2013

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