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Apple closes smartphone sales gap as Samsung loses market share

“Over the holidays we expect record sales of the iPhone 6 and iPhone 6 Plus, but we should not underestimate the Chinese vendors and local brands."

Samsung has lost market share to Apple as worldwide sales of smartphones to end users grew 20.3 percent to reach 301 million units during the third quarter of 2014.

According to latest Gartner findings, Cupertino closed the gap on its South Korean rivals, during a period which also saw mobile phones to end users remain flat.

“Sales of feature phones declined 25 percent in the third quarter of 2014 because the difference in price between feature phones and low-cost Android smartphones is reducing further,” says Roberta Cozza, research director, Gartner.

During the quarter, smartphones accounted for 66 percent of the total mobile phone market, and Gartner estimates that by 2018, nine out of 10 phones will be smartphones.

“Over the holidays we expect record sales of the iPhone 6 and iPhone 6 Plus, but we should not underestimate the Chinese vendors and local brands,” adds Annette Zimmermann, research director, Gartner.

“Chinese players will continue to look at expanding in overseas emerging markets.

“In Europe prepaid country markets and attractive lost-cost LTE phones will also offer key opportunities for these brands.”

As a result, Gartner expects sales of smartphones to reach 1.2 billion units in 2014.

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Vendors

In the third quarter of 2014, three of the top five smartphone vendors were Chinese as Huawei, Xiaomi and Lenovo grew their collective market share by 4.1 percentage points.

“With the ability to undercut cost and offer top specs Chinese brands are well positioned to expand in the premium phone market too and address the needs of upgrade users that aspire to premium phones, but cannot afford Apple or Samsung high-end products,” Cozza adds.

Meanwhile, Apple’s and Samsung’s combined smartphone share totalled 37 percent in the third quarter of 2014, down 7 percentage points from the same period last year.

“The smartphone market is more than ever in flux as more players step up their game in this space,” Cozza adds.

Samsung:

Sales of Samsung’s feature phones and smartphones declined in the third quarter of 2014, and Samsung lost market share in both markets.

Samsung’s deepest decline came from feature phones, which decreased by 10.8 percent year-over-year. Demand for Samsung’s smartphones weakened mostly in Western Europe and Asia.

Samsung’s smartphone sales declined 28.6 percent in China, the biggest market for Samsung.

Apple:

Sales of iPhones grew 26 percent in the third quarter of 2014. With the introduction of two large-screen phones for the first time, the iPhone 6 and iPhone 6 Plus, Apple managed to neutralise the advantage of Android competitors.

Gartner expects Apple to experience its biggest ever fourth-quarter sales, with both of its large-screen phones seeing demand exceed supply since their launch.

Huawei:

Although Huawei moved into the No. 3 position in the third quarter of 2014 there is still less than 1 million units between the bottom-three smartphone vendors in the top five.

Xiaomi:

Xiaomi made its debut among the top-five smartphone vendors. It experienced the highest growth of the quarter, with an increase of 336 percent driven by strong performance in China where it became market leader.

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Operating Systems:

In the smartphone OS market, Android continued to increase its market share with a rise of 22 percent (see Table 2). On the other hand, Windows lost market share.

“Microsoft needs to keep the momentum going from the third quarter, when Windows phone-based devices grew quarter-on-quarter thanks to the introduction of more mid-range devices,” Zimmermann adds.

Mobile phones

Worldwide mobile phone sales to end users totalled 455.8 million units in the third quarter of 2014 and were flat compared to the same period in 2013, while mobile phone sales were up in all regions except Latin America (down -7.4 percent), Western Europe (down - 13.5 percent) and Japan (down - 1.8 percent).

"Samsung and Nokia experienced sharp double-digit declines in the third quarter, which let Apple get closer to Nokia, with only 5 million units separating these two vendors,” Cozza adds.

“The gap is also narrowing between the third and fourth positions, and the fourth quarter could be decisive for Huawei and LG.”