IDC: Huawei, Lenovo grew Q2 smartphone market share at Samsung and Apple's expense

Continuing a trend that analysts have been tracking for several quarters, several Chinese smartphone vendors grew market share in the second quarter at the expense of Samsung Electronics and Apple (NASDAQ: AAPL), which continue to lead the market, according to a report from research firm IDC.

Both Samsung and Apple lost market share in the second quarter, according to IDC, while Huawei and Lenovo gained share and came in at the No. 3 and 4 spots, respectively. LG Electronics' market share in the smartphone market was relatively flat year-over-year, down just 0.1 percent, and it came in at No. 5 with 4.9 percent market share on a record 14.5 million smartphone shipments.

IDC charts the world's top five smartphone vendors in the second quarter of 2014.

Samsung saw its global smartphone market share slide 7.1 percent year-over-year to 25.2 percent in the quarter, and Apple's market share slipped to 11.9 percent from 13 percent a year ago. Huawei saw its market share grow to 6.9 percent from 4.3 percent in the year-ago period, as smartphone shipments nearly doubled from a year ago to 20.3 million units in the second quarter, IDC said. Lenovo shipped 15.8 million smartphones in the period and grew its market share to 5.4 percent from 4.7 percent a year ago, according to the report.

"Among the top vendors in the market, a wide range of Chinese OEMs more than outpaced the market in 2Q14," IDC noted.

The results underscore that local vendors in emerging markets are driving growth as they undercut Samsung and Apple, especially in markets like China and India. Overall, the worldwide smartphone market grew 23.1 percent year-over-year in the second quarter, establishing a new single quarter record of 295.3 million shipments, IDC said.

"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," IDC analyst Melissa Chau said in a statement. "The offer of smartphones at a much better value than the top global players but with a stronger build quality and larger scale than local competitors gives these vendors a precarious competitive advantage."

IDC noted that Samsung shipped millions of Galaxy S5 units this quarter, despite analysts and reviewers arguing the phone was not that different from last year's S4 model. IDC did note that volumes from the S4 and even the older S3 remained strong, giving customers cheaper options. Yet despite having one of the largest smartphone portfolios of all OEMs, Samsung lost share, highlighting that it needs to focus on building momentum in markets dominated by local brands, IDC said.

The second quarter, or Apple's fiscal third quarter, is always its seasonal low point of the year, but that was even more pronounced this year in advance of the expected fall launch of the iPhone 6, which is expected to have a larger screen. "Apple enjoyed continued success in the BRIC markets, a good sign that it is building its footprint in emerging markets," IDC added. "Given the pent-up demand, the third quarter could be a drought or a flood, depending on the timing of the next (iPhone) launch."

Huawei noted this week that its smartphone shipments jumped 62 percent year-over-year in the first half of 2014 and that it is on pace to reach its goal of shipping 80 million smartphones for the full year. IDC said that Huawei is picking up momentum in China's growing LTE smartphone market with high-end devices like the Ascend P7. The company is also selling large volumes of its lower-cost Y-series device outside of China and is looking to expand its global reach.

Lenovo had a record quarter in China despite strong pressure from local brands, which include ZTE and Xioami, IDC said. During the quarter, Lenovo saw increased success from the A788T, as well as the 3G A388T. Lenovo, which is working to acquire Google's Motorola, is also expanding internationally. Whereas less than 5 percent of Lenovo's shipments were outside of China in the second quarter of 2013, the company nearly tripled such sales this quarter, with emerging markets, particularly BRIC countries, picking up the largest volumes.

LG's volumes in the quarter were largely driven by its mid-range L–series phones, helped by models like the L70, which performed well in many markets including the United States, IDC said. The company launched its flagship G3 smartphones end of the quarter in South Korea, and then in the United States earlier this month.

For more:
- see this IDC release
- see this The Verge article
- see this Bloomberg article
- see this ZDNet article

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