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Huawei is Biting Samsung and Apple's Pancake

By Ray Chen | February 5th 2015

Huawei Technologies and Lenovo Group gained market share at the expense of Samsung Electronics in the second quarter, according to the latest data released by research firm IDC.

Huawei's shipments in the quarter jumped 95% from a year earlier, while Lenovo enjoyed a 39% increase, IDC said. Both companies outpaced the 23% growth in the overall smartphone market. Shipments at Samsung, the world's largest smartphone maker, declined 3.9%.

While China's smartphone market is becoming more saturated, demand is strong in emerging markets in Asia, Latin America and Africa, where many consumers are still replacing their basic feature phones.

"As the death of the feature phone approaches more rapidly than before, it is the Chinese vendors that are ready to usher emerging market consumers into smartphones," Melissa Chau, a senior research manager at IDC, said in a statement.

In the second quarter, Huawei was the third largest smartphone maker in the world, as its smartphone market share rose to 6.9% from 4.3% a year earlier. While it still trailed Samsung and Apple by a larger margin, the gap between Huawei and the two market leaders narrowed. Samsung's market share dropped to 25% from 32% a year earlier, while Apple's share fell slightly to 12% from 13%.

For Apple, its expected release of the new iPhone 6 later this year is likely to boost its market share. In the second quarter, many consumers were holding off iPhone purchases to wait for next-generation iPhones with larger screens, IDC said.

Over the past few years, Huawei and Lenovo competed fiercely against Samsung in China, but the domestic market is finally showing signs of maturity and slowing growth. To continue their growth, both Huawei and Lenovo have been stepping up their efforts to sell more smartphones abroad.

In terms of global brand recognition, Samsung is far ahead of the Chinese players. Still, the latest results indicate that Huawei and Lenovo are posing a bigger threat to Samsung's dominance.

Huawei said its smartphone shipments in the Middle East and Africa in the first half of 2014 jumped more than sixfold from a year earlier, while shipments in Latin America rose nearly fourfold. Lenovo, meanwhile, has been expanding mainly in Southeast Asian markets like Indonesia.

Lenovo is also counting on its planned $2.91 billion acquisition of Motorola Mobility from Google to boost its global presence. In May 2014, Lenovo Chief Executive Yang Yuanqing said the company would take advantage of Motorola's strong relationships with mobile carriers in North America and Latin America. In the U.S., Lenovo plans to sell Motorola-branded phones instead of using its own brand.

It is really growing every fast that, remember Huawei CEO Ren Zhengfei told to his terminal team: I don't want to see profit neither shipments, what I want is market share, when you can report to me we catch up Samsung's market, can you?".

Huawei carrier network BU still contribute main profit, second is terminal BU.

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