Apple and Samsung's grip on smartphones weakening

Cheaper alternatives gain ground in third quarter

A flurry of cheap smartphones entering the market is threatening the dominance of market leaders Samsung and Apple.

New IDC data shows that during Q3, vendors collectively shipped 327.6 million units, up 25.2 per cent year on year.

Over the three months, both market-leader Samsung and next-in-line Apple lost market share – the duo took 23.8 per cent and 12 per cent of the market respectively in Q3, down from 32.5 per cent and 12.9 per cent respectively the year before. The firms were the only two of the top five vendors to see their shares dip over the period.

Samsung was the only top-five smartphone vendor to see its shipment volume slump annually, falling 8.2 per cent to 78.1 million units. IDC put the fall down to "cooling demand" for its high-end devices and pointed to a surge in popularity among cheaper alternatives, driven by emerging markets.

"We've finally reached a point where most developed markets are experiencing single-digit growth while emerging markets are still growing at more than 30 per cent collectively," said IDC researcher Ryan Reith.

"In these markets, smartphone price points are making mobile computing possible where we once expected feature phones to remain dominant. This is great news for overall volumes, but the challenge has now become how to make money on devices that are quickly becoming commodity products. Outside of Apple, many are struggling to do this."

LG, Lenovo and Chinese firm Xiaomi – which entered the top five for the first time – all enjoyed significant market share boosts in Q3, IDC added, pointing to the former as the key beneficiary of producing increasingly cheap models.

"LG's strategy to court the market with low-cost smartphones has paid enough dividends to push its total volumes past the 15 million unit mark for the first time in the company's history," IDC said.