Real winner of Apple vs Samsung rivalry is… (not one you think)

A clear winner is finally emerging in the clash of the world’s top 2 smartphone vendors. And it isn’t the one on whose side you may be.

It’s actually the No. 3 player in the world, Chinese brand Huawei, whose saw its sales surge by 46.3 per cent in the second quarter of 2015, according to Gartner Inc. data.

The surge is in stark contrast to a global slowdown in smartphone sales growth in Q2 2015, averaging 13.5 per cent year-on-year.

Huawei’s growth becomes even more prominent when compared with market leader Samsung, whose sales actually declined by 5.3 per cent in the period, and even the second-placed Apple, who saw sales growth of 36 per cent.

“Despite the launch of new S6 models, Samsung’s premium phones continued to be challenged by Apple’s large-screen iPhones,” says Gartner in its Q2 report on the global smartphone market.

“Samsung lost 4.3 percentage points in market share and declined 5.3 per cent in unit sales in the second quarter of 2015. Huawei recorded the highest sales growth rate of 46.3 per cent, thanks to strong overseas sales and 4G smartphone sales in China,” the Gartner report highlights.

Worldwide smartphone sales recorded the slowest growth rate since 2013 in the second quarter of 2015, according to data. Worldwide sales of smartphones to end-users totalled 330 million units, an increase of 13.5 per cent over the same period in 2014.

Market research firm IDC said yesterday that it now reckons growth in global smartphones shipments will witness a further slowdown during the rest of the year, resulting in a growth rate of 10.4 per cent in 2015, to 1.44 billion units.

This is lower than IDC’s own previous smartphone forecast of 11.3 per cent year-on-year growth in 2015. The firm said it expects to see a noticeable slowdown in smartphone shipments in 2015 on the back of China joining North America and Western Europe in a more mature growth pattern.

Nevertheless, smartphone technology continues to improve and competition continues to drive down costs, making entry-level smartphones affordable for a growing number of individuals in new, emerging markets.

IDC maintains that “steadily falling average selling prices (ASPs) will fuel steady growth through the end of the forecast period (2015-2019), with global shipments reaching 1.9 billion units in 2019.’

According to Gartner’s analysis too, the growth will be driven by lower-cost models in emerging countries, with Middle East one of the fastest growing markets for smartphone sales.

“While demand for lower-cost 3G and 4G smartphones continued to drive growth in emerging markets, overall smartphone sales remained mixed region by region in the second quarter of 2015,” said Anshul Gupta, research director at Gartner.

Emerging Asia/Pacific (excluding China), Eastern Europe and Middle East and Africa were the fastest-growing regions, driven by good performance from Chinese and local vendors, says Gartner.

As can be inferred from the statistics, Huawei’s market share growth has come at the expense of market leader Samsung, whose flagship Galaxy S6 and Galaxy S6 Edge smartphones were squeezed by Apple’s iPhone 6 and iPhone 6 Plus from the top and Huawei’s mid-ranged offerings from below.

Read: iPhone 7 vs Galaxy S6: How Apple stole Samsung's lunch

“Apple’s double-digit growth in the high-end segment continued to negatively impact its rivals’ premium phone sales and profit margins,” says Gartner in the latest report.

“Many vendors had to realign their portfolios to remain competitive in the midrange and low-end smartphone segments. This realignment resulted in price wars and discounting to clear up inventory for new devices planned for the second half of 2015,” it noted.

The discounting Gartner refers to in its report includes the ‘price adjustments’ that Samsung had to make to its flagship smartphones thanks to Apple’s continued growth.

Read: Galaxy S6, S6 Edge price cut as Apple readies iPhone 7 launch

Android vs iOs vs Windows

Gartner maintains that, in the smartphone operating system (OS) market, Android’s global share was affected by the weak performance of China in the second quarter of 2015 and the strong performance in China of Apple, which has taken share from Android for the last three quarters.

“Android saw its lowest year-over-year growth of 11 per cent with share reaching 82.2 percent in the second quarter of 2015,” said Gartner’s Gupta.

According to IDC, however, despite Apple’s continued success with its variants of the iPhone, the story among operating systems is not expected to change throughout the forecast, with Android’s 81 per cent share in 2015 carrying forward until 2019.

The research firm basis its calculations on the fact that future growth in smartphone sales is expected to come from emerging markets and first-time buyers ( and not established markets or replacement buyers) – which is an extremely price-competitive segment, a part of the market where Apple and therefore iOS is not present.

“Markets with the biggest growth opportunity are extremely price sensitive, which IDC believes will not change, and this is the main reason Apple will be challenged to take Android share throughout the forecast,” it notes.

“Even if Apple were to introduce another low-cost iPhone (e.g., ‘C’ version), IDC believes the price will struggle to compete with Android OEMs that are focused on portfolios aimed at price points of $200 (Dh735) and less,” it says.

IDC reckons Android shipments globally will grow from 1.06 billion in 2014 to 1.54 billion in 2019, while iOS shipments will grow from 192.7 million in 2014 to 269.6 million in 2019.

Windows will, at best, remain a fringe player, analysts believe. IDC’s view that Microsoft/Windows Phone will remain a marginal challenger at best has not changed, it states.

Gartner too says that, in the most recent quarter, Microsoft continued to struggle to generate wider demand for Windows Phone devices — even at the lower end.

“In light of Microsoft's recent cuts in its mobile hardware business, we'll await signs of its long-term commitment in the smartphone market,” said Gartner’s Gupta.