Samsung's market share plunged on Note 7 debacle, Gartner says

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Samsung suffered its worst decline in global smartphone sales during the third quarter, following the disastrous launch of the Galaxy Note 7, according to fresh data from Gartner. The company’s short-term prospects in the competitive market will largely hinge on the success of its next flagship phone, the firm said.

Sales of Samsung’s smartphones plunged 14.2% year over year, Gartner said, as its share of the worldwide market dropped to 19.2% from 23.6%. The South Korean electronics giant once again was the top-selling smartphone vendor during the quarter, but it sold only 71.7 million units, down from 83.6 million smartphones a year ago.

"The decision to withdraw the Galaxy Note 7 was correct, but the damage to Samsung's brand will make it harder for the company to increase its smartphone sales in the short term," Gartner research director Anshul Gupta said in a statement. "For Samsung, it's crucial that the Galaxy S8 launches successfully, so that partners and customers regain trust in its brand.”

Apple retained its position as the second-largest smartphone vendor in the world, although its market share declined from 13% a year ago to 11.5% in the most recent quarter. Apple’s sales fell by 8.5% in the United States and by 31% in China, which are its two of its biggest markets, according to Gartner.

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Meanwhile, three Chinese companies accounted for 21 percent of all smartphones sold during the quarter, and were the only vendors in the top five to see an increase in sales during the period. Huawei was the No. 3 smartphone vendor during the quarter, claiming 8.7% of the market with 32.5 million smartphones sold, up from 27.4 million in 2015. Oppo saw its market share nearly double year over year from 3.4% to 6.7%, ranking fourth among all vendors, and fellow Chinese vendor BBK Communication Equipment was the fifth-largest vendor with 5.3% of the market.

Perhaps the most notable takeaway from Gartner’s data is the continued emergence of Huawei as a major player on the worldwide scene despite its lack of presence in the United States. The company’s high-profile Honor 8 has been all but ignored by operators such as Verizon, AT&T, T-Mobile and Sprint, but Huawei could make significant gains in 2017 if it can grow its business in North America and Europe.

“Huawei is closing the gap with Apple,” Gartner wrote. “Highly competitive and feature-packed Honor devices maintained their sales momentum in markets around the world, with expansion into Europe and the United States likely to help Huawei record another year of promising growth.”