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Samsung Lost Smartphone Market Share for First Time in 4 Years

Samsung Electronics retained its top ranking in smartphone sales in the first quarter, but lost global market share for the first time in four years, highlighting the difficulties the company faces in the competitive  mobile market.

Data from research firm Strategy Analytics Tuesday showed the South Korean company’s first-quarter smartphone market share in terms of units sold slipped to 31.2%  from 32.4% a year earlier. Its closest rival, Apple, also saw its market share slip to 15.3% from 17.5% a year earlier in the same period.

Strategy Analytics said Samsung shipped 89 million units in the first quarter, compared to Apple’s 43.7 million units.  Samsung doesn’t disclose its smartphone shipments.

On Tuesday, as it reported quarterly earnings, Samsung said its profit margin on smartphones was unchanged from a year earlier at 19.8%. But analysts say that margin could face pressure in future quarters as competition intensifies.

“Samsung continues to face tough competition from Apple at the higher-end of the smartphone market and from Chinese brands like Huawei at the lower-end,” Neil Mawston, executive director at Strategy Analytics, said in the report.

So which companies gained at the expense of Apple and Samsung? Two Chinese electronics giants that are better known for making other kinds of hardware.

PC giant Lenovo, which earlier this year announced plans to buy Motorola Mobility’s handset business, saw its first-quarter handset shipments jump 58% in the first quarter, giving it a market share of 4.7%, up from 3.9% a year earlier. Network-equipment maker Huawei, which ranked third globally, sold 13.4 million units in the quarter, up from 10 million a year earlier, giving it a share of 4.7%.

“Huawei is expanding swiftly in Europe, while Lenovo continues to grow aggressively outside China into new regions such as Russia, “ said Linda Sui, senior analyst at Strategy Analytics.

She said once Lenovo’s takeover of Motorola is approved, “this will eventually create an even larger competitive force that Samsung and Apple must contend with in the second half of this year.”