66pc of mobiles sold in 2014 were smartphones, Xiaomi hammers on gates of Samsung

16 Dec 2014

The Xiaomi Mi 2S

For the first time Chinese consumer electronics player Xiaomi has entered the top 5 of global smartphone makers worldwide, at Samsung’s expense. Some 66pc of mobiles sold in 2014 were smartphones, says Gartner.

Worldwide sales of mobile phones to end users were flat in the third quarter of 2014, according to Gartner.

However, sales of smartphones to end users grew 20.3pc to reach 301 million units.

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

By 2018 nine out of 10 phones will be smartphones

In the third quarter of 2014, smartphones accounted for 66pc of the total mobile phone market, and Gartner estimates that by 2018, nine out of 10 phones will be smartphones.

Emerging markets exhibited some of the highest growths ever recorded with Eastern Europe and the Middle East and Africa achieving the highest increase in the third quarter of 2014, with sales of smartphones growing almost 50pc year-over-year.

Among the mature markets, the US achieved the highest growth, with an 18.9pc increase in the third quarter of 2014, fostered by the launch of the iPhones 6 and 6 Plus. Western Europe saw a decline of 5.2pc, the third consecutive decline this year.

China rising

“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,” said Annette Zimmermann, research director at 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.” Gartner expects sales of smartphones to reach 1.2 billion units in 2014.

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

Apple’s and Samsung’s combined smartphone share totalled 37pc in the third quarter of 2014, down 7pcage 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 added.

Samsung under pressure from the Chinese

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 10.8pc year-over-year.

Demand for Samsung’s smartphones weakened mostly in Western Europe and Asia. Samsung’s smartphone sales declined 28.6pc in China, the biggest market for Samsung.   

Sales of iPhones grew 26pc 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.

Although Huawei moved into the No. 3 position in the third quarter of 2014 there is still less than 1m units between the bottom-three smartphone vendors in the top 5.

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

In the smartphone OS market, Android continued to increase its market share with a rise of 22pc. 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,” Zimmerman said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years