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Xiaomi Beats Samsung in China's Smartphone Market with 14% in Market Share - Canalys

Xiaomi Beats Samsung in China's Smartphone Market with 14% in Market Share - Canalys Credit:Canalys

Canalys, an independent analyst company released latest numbers of the sales of smartphones for the second quarter of 2014, showing that 292.4 million smartphones were shipped during this period. China's own smartphone brand, Xiaomi saw a phenomenal increase in the shipment of its devices on the back of demand from the world's largest smart phone market, mainland China which made up 37% of global shipments or 108.5 million units in the last quarter. Xiaomi's share in China's market is currently 14%.

Globally, Samsung still retains its lion share, accounting for 26% of global sales for the last quarter, although the number fell slightly from 31% the quarter before. Samsung's decline in terms of its share is attributable mainly to the competition from China's own smartphone vendors which together, took 65% share of the China market. According to Canalys, Xiaomi's stellar performance in China enabled it to join the global top players - Samsung, Apple, Huawei and Lenovo - to make up the top 5 players in the segment. Apple, Huawei, Lenovo and Xiaomi accounted for 12%, 7%, 5% and 5% respectively, for last quarter's global market share. 

Canalys is now targeting other markets in the region including Indonesia, Mexico, Russia, Thailand and Turkey to grow its sales.  

"This is a phenomenal achievement for Xiaomi. Undoubtedly this was helped by an anticipated, temporarily under-strength Samsung performance during the quarter. But that is only half the story - Xiaomi has also executed on its strategy to grow volume shipments. It has delivered compelling products at aggressive price points, focused chiefly on its locally relevant MIUI software features and services, backed by effectively targeted marketing. In particular, its affordable RedMi range is booming and has been the driver for growth, despite attracting less global media attention than its flagship Mi products. But it does now need to deliver LTE products in China to address growing demand for 4G services if it is to retain its momentum.

-  Jingwen Wang,  Research Analyst, Canalys

"Its aggressive pricing model will certainly resonate beyond China, but the challenge it faces in scaling its model for success on a global stage should not be underestimated. Xiaomi needs to build its international brand, and will need to localize its services offering with MIUI for the different markets into which it expands, else its differentiation, value proposition and service-oriented revenue streams will be eroded. And it must tailor its marketing and largely online sales channels accordingly. That said, Xiaomi does have the potential to be a disruptive force beyond China and international vendors should take note.

-  Jessica Kwee, Analyst, Canalys

Author

Executive Editor and Telecoms Strategist at The Fast Mode | 5G | IoT/M2M | Telecom Strategy | Mobile Service Innovations 

Tara Neal heads the strategy & editorial unit at The Fast Mode, focusing on latest technologies such as gigabit broadband, 5G, cloud-native networking, edge computing, virtualization, software-defined networking and network automation as well as broader telco segments such as IoT/M2M, CX, OTT services and network security. Tara holds a First Class Honours in BSc Accounting and Finance from The London School of Economics, UK and is a CFA charterholder from the CFA Institute, United States. Tara has over 22 years of experience in technology and business strategy, and has earlier served as project director for technology and economic development projects in various management consulting firms.

Follow Tara Neal on Twitter @taraneal11, LinkedIn @taraneal11, Facebook or email her at tara.neal@thefastmode.com.

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