Huawei, Lenovo and ZTE give chase to Apple and Samsung in Q2 smartphone race

Although Samsung Electronics and Apple (NASDAQ:AAPL) continued to lead the smartphone market in the second quarter, according to research firms, their dominance is coming under stronger pressure from smaller rivals, especially Chinese firms Huawei, Lenovo and ZTE.

According to both IDC and Strategy Analytics, Samsung and Apple took the No. 1 and 2 spots in the global smartphone market in the quarter, but Apple's smartphone market share fell to its lowest level for three years, according to Strategy Analytics. Both firms reported that Apple's smartphone market share fell in the quarter, with IDC pegging it at 13.1 percent and Strategy Analytics saying it was 13.6 percent.

"Apple grew just 20 percent annually during Q2 2013, which is less than half the overall smartphone industry average of 47 percent," Strategy Analytics analyst Neil Mawston said in a statement. "Apple's global smartphone market share of 14 percent is at its lowest level since the second quarter of 2010. The current iPhone portfolio is under-performing and Apple is at risk of being trapped in a pincer movement between rival 3-inch Android models at the low-end and 5-inch Android models at the high-end."

The verdict on Samsung was more difficult to discern, as IDC said Samsung's smartphone market share dipped year-over-year to 30.4 percent from 32.2 percent, while Strategy Analytics said Samsung's global smartphone market share actually grew to 33.1 percent from 31.1 percent. Samsung benefited from strong sales of its flagship Galaxy S4 smartphone but also form price discounts on its older S III model, IDC noted.

While the top two smartphone vendors remained the same from the first quarter, smaller firms were gaining in market share. According to IDC, LG Electronics, Lenovo and ZTE rounded out the top five smartphone vendors in the period. LG, which shipped a record 12.1 million smartphones in the quarter, saw its share grow year-over-year from 3.7 percent to 5.1 percent, while Lenovo grew from 3.1 percent to 4.7 percent and ZTE from 4.1 percent to 4.2 percent, IDC said.

"The growth in the mobile phone market was partly driven by vendors from outside the Top 5 who experienced torrid shipment growth that outpaced the overall market," IDC noted. "Several vendors, including Alcatel and Huawei, had high double- and triple-digit growth rates in the second quarter for their Android-based offerings shipped to high-growth countries such as China and India. In 2Q13, these vendors from outside the Top 5 accounted for 44.8% of the overall shipment volume, up from 42.2% in the same quarter one year ago."

Strategy Analytics said LG, ZTE and Huawei rounded out its top five smartphone vendor ranks for the quarter, with each growing share in the period. The research firm called out LG's performance in particular.

"LG was a star performer as global shipments doubled year-over-year to 12.1 million units in Q2 2013," Strategy Analytics analyst Linda Sui said in a statement. "LG captured 5 percent share and maintained its position as the world's third largest smartphone vendor for the second straight quarter. The popular Optimus and Nexus models have been the main drivers of LG's success. If LG can expand its retail presence and marketing in major countries such as the U.S. or China, LG could quietly start to challenge Apple for second position." However, that may difficult to do in the coming quarter, as Apple is likely to introduce at least one new iPhone model in the fall.

In the overall global handset market, IDC said that vendors shipped a total of 432.1 million mobile phones in the second quarter, compared to 407.7 million units in the year-ago period and. 428.8 million units shipped in the first quarter of 2013.

Strategy Analytics reported lower numbers, and said global mobile phone shipments reached 386 million units in the second quarter, rising 4 percent from 371.5 million in the year-ago quarter. The firm said this was the mobile phone industry's fastest growth rate since the second quarter of 2012. Strategy Analytics' numbers do not include grey market phone shipments, which account for the lower total than that of IDC.

For more:
- see this IDC release
- see this Strategy Analytics release
- see this separate Strategy Analytics release
- see this Bloomberg article
- see this WSJ article (sub. req.)
- see this The Next Web article
- see this AllThingsD article

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