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Chinese smartphones gain market share in Q2

Chinese smartphone manufacturers grow their market share: Canalys

Shipments of smartphones in China grew 108% year on year in Q2.
Shipments of smartphones in China grew 108% year on year in Q2.

Chinese smartphone manufacturers continued their assault on market leader Samsung and Apple in the second quarter of the year.

Some 238.1m units shipped in Q2, an impressive 50% year-on-year increase. And while Samsung and Apple grew their shipments by 55% and 20% respectively to maintain first and second place, both lost share to Chinese vendors, according to global research firm Canalys.

Lenovo, Yulong and Korean vendor LG completed the top five vendors. Collectively, the five Chinese vendors shipping the most devices worldwide (Lenovo, Yulong, Huawei, ZTE and Xiaomi) made up 20% of the total market, up from less than 15% a year ago.

Apple's market share fell to its lowest level since Q1 2009, but its numbers were buoyed by the performance of its older models after a price cut.

"The high end of the market continues to grow but there is no doubt that the explosive growth will come from the low end of the market," said Chris Jones, VP and principal analyst.

"Apple needs to respond to this dynamic and it is evident from the performance of its older models this quarter that there is real demand for a new low-cost iPhone. The challenge that it faces is maintaining high margins on arguably the most important products in its portfolio," he added.

Shipments in China grew 108%, year on year, the second highest growth rate of the major markets, to 88.1m. This represented over a third of all worldwide shipments. Lenovo took second place in China in Q2, where it shipped 10.8m smart phones. Some 95% of its total 11.3m shipments were in its home market, helping take it to third place in the worldwide smart phone market for the first time.

"Lenovo has benefited from its large TD-SCDMA product portfolio, much of which is aimed at the low end," said Nicole Peng, research director, China.

"China Mobile's strategy of continuously pushing TD-SCDMA smart phones to the mass market benefits local vendors, in particular Lenovo and Yulong. The critical task for these vendors now though is to reduce their reliance on their home market and grow their businesses internationally. To achieve this they will need to invest in patents, establishing local teams and channels as well as diversifying their product portfolios to attract a broader range of consumer segments."

The US was still in second place in terms of shipments, but geographically, India stood out this quarter with smartphone shipments there growing the fastest of the major markets, by 129%, to hit 9m and make it the world's third largest smart phone market.