Sales of Xiaomi smartphones have reached half of those of the iPhone. Is Apple in danger? Smartphone sales results in the world
For a long time, Sony was considered the “Japanese Apple”, as it created truly unique, unusual and innovative devices for its time. Unfortunately, in the 2000s, her passion faded somewhat, although now things have begun to improve. Nevertheless, a holy place is never empty, and the Koreans picked up the baton. Samsung creates very interesting devices, invests a lot of money in technology, although it does not shy away from borrowing ideas from competitors. But in technical terms, this is one of the market leaders who is not afraid to experiment either. It would seem that the intrigue would end there, but the most dangerous competitor showed his grin only now. Yes, yes, the Chinese have launched a large-scale offensive. So far, this is especially noticeable only in the native market, although, given its volume, it’s time for industry giants to start being afraid. It's about the company Xiaomi, which currently sells only half as many of its smartphones in China as Apple does.
It is worth noting that Xiaomi has been on the market for several years now, although it started with . Nevertheless, the company entered its home market really loudly, and word of mouth spread around the world. Its devices turned out to be of high quality, powerful, very compact and at the same time cost half as much as competing flagships with similar characteristics.
Why should Apple be so worried about this? The point is that 70% The company receives income from the sale of iPhones, with the vast majority of the money coming from sales of expensive flagship models. Yes, the American manufacturer is incredibly popular in the USA and Europe, its brand is known all over the world, but the growth of developed markets has seriously slowed down in recent years, which is especially noticeable in the field of consumer electronics.
iPhone sales to annual growth ratio
But emerging markets, on the contrary, are growing by leaps and bounds. These are countries like India And China. The only problem is that the population in these regions prefers to purchase inexpensive smartphones. Apple's refusal to release a cheap iPhone initially opened the way to emerging markets for Samsung and other well-known brands, and now Chinese smartphone manufacturers have rushed into this niche, including Xiaomi, which are developing at a rapid pace.
The first cheap Chinese smartphones were not of high quality, and even the hero of this news had questions. But now, in terms of their characteristics, some Chinese devices have come very close to famous flagships, and Xiaomi is one of the leaders in this regard, having managed to create a kind of cult in China, as Apple did in the US in the past. Naturally, against this backdrop, sales of Chinese smartphones shot up at warp speed. For example, in the first quarter of this year, sales of Xiaomi phones, which is now rightly called the “Apple of the Celestial Empire,” reached 15 million devices, which amounted to 278 percent increase compared to last year's result.
In China, Xiaomi already sells more phones than Apple, and 15 million is almost half of the projected iPhone sales worldwide in the current quarter (about 35 million). Of course, when an American company releases it, it will sell it in a few quarters 60–70 million such devices, but the sales of the Chinese competitor will not stand still and may well approach those of Apple.
Where do rice lovers get such agility? Here's a simple example - flagship Xiaomi Mi3 sold at a price of $320 , which is about half the cost in the US. At the same time, the characteristics of the Mi3 easily compete with both the American smartphone and its Korean counterparts. Moreover, Xiaomi also has some very nice Android smartphones in its assortment, priced at $100 .
And it would be fine if this one company stood up to Apple. There are other fast Chinese enterprises that produce high-quality and inexpensive phones. Recently the company has experienced a real boom OnePlus with your smartphone One. The 5.5-inch (Full HD) flagship with a 13-megapixel camera with a Sony Exmor sensor, a quad-core Snapdragon 801 processor (2.5 GHz), 3 GB of RAM, a 16 GB storage and a 3100 mAh battery also costs half cheaper than iPhone 5s.
Pay attention to how rapidly the market for cheap smartphones is growing - at the moment, together, these Chinese companies are already selling many more phones than Apple:
And this is not plastic trash that crumbles right in your hands. These companies offer very interesting handsets, and the above-mentioned OnePlus One is an excellent example. There are no less interesting developments Huawei(remember the same ultra-thin (6.5 mm) Ascend P7 with a 5-inch Full HD display and a weight of 124 g), and ZTE, and from other companies. Moreover, remakes actively use technology Steve Jobs to attract the masses and form their own cult. Again, a great example is the head of OnePlus Pete Lau(former vice president Oppo), whom Chinese fans now simply idolize.
Thus, the average price difference between Chinese flagships and the iPhone is $300 - that’s how much Apple earns on each smartphone. If an American company decides to lower the prices of its devices in order to compete with Xiaomi and similar companies, then it will actually hit its own profits.
Could this happen? Ferocious Apple fans will dismiss such an idea, noting that the company is a premium brand for premium users. She's something like BMW or Mercedes in the mobile market, while Xiaomi, OnePlus and other “Chinese” can be compared with Chrysler or Ford. The analogy is compelling, but there are two important factors to keep in mind:
- First- Apple's user base has long expanded beyond the “premium market” of Mercedes and BMW buyers. For example, in the USA its share is 40%, while the luxury car market is at the level of 10–11%. That is, the company already sells a ton of phones to those who drive Chryslers and Fords, as well as to users who prefer public transport.
- Second factor is that, unlike the automobile market, the mobile market is primarily tied to the platform. That is, third-party developers create products (applications and services in this case) that are focused on working with a specific platform. And in this case, market share is very important. If it drops too much, third-party developers will have less incentive to create products for the platform. And if the platform has few applications and services, then users will also have little reason to stick with it.
It turns out that Apple's falling market share in some markets will make it even harder to compete, even with iPhone prices falling.
In developed countries, it is easy for the company to maintain a fairly high market share, even taking into account the high cost of its smartphones. This is possible thanks to mobile operators offering their customers smartphones at a big discount, but on contract terms. Psychologically, it’s easier for people to pay $200 for the same iPhone, even with a two-year contract. But in emerging markets and those where the model of subsidizing smartphones by operators is not common, inexpensive handsets are a serious threat to Apple’s well-being. The combination of the high price of devices and the small market share of the platform makes the growth of an American company in the markets of India and China (the most promising at the moment) very difficult.
When Xiaomi created their first tablet, they did not reinvent the wheel and simply borrowed design ideas from
Does this mean that Apple is in danger? No. The release of iPhone 6 will bring strong sales, huge profits to the company and even expand its market share in developed markets. Record financial results will be achieved again. In addition, we should not forget that the American manufacturer has more money in its accounts than it or any other IT structure needs, and this is a huge financial margin of safety.
On the other hand, everything written above suggests that Apple's profitability in the next few years will be under serious pressure from competitors. So far, inexpensive and high-quality Chinese smartphones are mainly conquering the native market, but in the near future they will flood into the world. Naturally, such a situation will not have the best effect on the company's shares, even if its profits continue to grow. [
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According to the latest market research conducted by AVANTI, the research arm of TrendForce, Xiaomi has become the most frequently used smartphone brand among Chinese consumers. Xiaomi has already managed to rise noticeably, and according to the latest data, it has surpassed such a large giant as, and is currently in first place in the Chinese market. TrendForce believes that Xiaomi is no longer greatly influenced by sales of smartphones such as Lenovo and ZTE, which produce products similar in price category.
Xiaomi is probably the most well-known brand for its “low cost and high performance” and, as many respondents noted, reputation. According to AVANTI research, more than 60% of consumers surveyed expressed interest in purchasing the Xiaomi Red Mi Note 2 due to its high price/performance ratio, as well as its availability in the economy class smartphone segment. Of the respondents surveyed, the majority of those who were interested in the device because of its low price (from 39 years of age or younger). The male half of China is most interested in internet connectivity, and they tend to be more interested in the Xiaomi brand because of this than their female counterparts.
Smartphones have also managed to win over users of various smartphones from other brands. Compared to Apple, which enjoys high customer loyalty to its brand, many of the Android smartphone companies have suffered from the rise in popularity of the Xiaomi brand. A strong desire to switch to the Xiaomi Red Mi Note 2 smartphone was expressed by users among Samsung and ZTE, and moderately among users from Lenovo and Huawei.
According to data collected by AVANTI, one third of Chinese respondents believe that the Chinese company Xiaomi, currently ranked third in the category of “most used smartphone brand” in the world, will soon take the leading position and overtake giants such as Apple and Samsung in this field.
In just a few months, we will summarize the results of smartphone sales for 2017, and looking at the third quarter figures, we are sure of one thing - Xiaomi is showing the highest growth rates.
The only question is how long will Xiaomi be able to maintain this pace?
In just 2 months, the end of 2017 will be over, and one of the phenomena for which we will remember these twelve months will, of course, be the incredible growth in popularity of the Chinese company Xiaomi. Just a few months ago, few people had heard of this manufacturer, but today it is one of those companies that appears in any topics about smartphones, discussions regarding devices from almost any segment - from the cheapest ones like Xiaomi 4A. And if we look at the smartphone sales results for the third quarter of 2017, then everything falls into place.
The sales report was prepared by the analytical company IDC and its main data, you will see on the right. As you can see, Samsung still has the largest market share, followed by Apple and Huawei.
And what interests us most is the number of devices sold per year from individual manufacturers, i.e. compared to the third quarter of 2016. Here Samsung (+9.5%) and Huawei (+16.1%) can again boast good results, while Xiaomi’s result is simply cosmic numbers - 102.2%! From July to the end of September, the company shipped 27.6 million devices to stores, and if it maintains this amazing growth rate for the year, the company will sell the most smartphones in the world next year. More smartphones than Huawei or Apple!
That's right, the only question is will Xiaomi be able to maintain this pace of development? This is not an easy task, but it is certainly not impossible, and we will keep an eye on it. One thing is clear - the company cannot rest on its laurels and must constantly release successful devices, like Xiaomi Redmi Note 4.
Chinese smartphone makers have recently stopped being associated with counterfeit devices from other companies and are increasingly posing a threat to popular brands such as Samsung and Apple.
This is not surprising, since their top shelf phones are often much better value for money than their competitors. This was reflected in the sales results, according to which Xiaomi, Huawei And Meizu show a constant increase in results.
The first of these manufacturers admittedly failed to achieve the targets set earlier this year, but there is no point in complaining about the current situation. Xiaomi previously assumed that in 2015 it would ship 80 million smartphones. For comparison, in 2013, the Chinese sold 18.7 million smartphones, and a year later the number of their sales had already reached 61.1 million. Taking this into account, the company management decided that the result of 80 - 100 million sales per year is quite possible.
The reality turned out to be different, and at the moment it is known that Xiaomi has sold a total of 73 million devices, and this is a very good result. Analysts suggest that they are much lower than the announced results because for a long time its share has been constantly falling due to market saturation. In addition, it is quite important to take into account Chinese competition, where other companies are constantly nipping at Xiaomi’s heels. Nevertheless, Xiaomi boasts of being the 4th or 5th largest smartphone manufacturer in the world.
It is worth noting that recently Xiaomi was defeated in the domestic market by a competitor Huawei. But this is not due to the poor track record of the first, but the very good results of the other. As it turned out, Huawei managed to sell a total of more than 100 million smartphones during the past year. Thanks to this, the manufacturer rose to first place in China and, based on the results achieved, took third place in the world market. As usual, Samsung and Apple were ahead.
It is worth noting that Huawei products are more accessible outside of China, as in many countries around the world, since the company is the official distributor of its products. In the case of Xiaomi, the situation is a little different, since, albeit slowly, the company is also trying to enter new markets. It's also worth noting that next year, Huawei plans to expand the Honor brand in the US and launch the Mate 8 in most countries.
The latest Chinese brand to perform very well is Meizu. True, the manufacturer cannot compete with the above-mentioned companies, but the steady increase in its productivity allows us to predict that in the future the gap between competitors will steadily decrease. According to official data, Meizu sold more than 20 million phones last year, up 350% from the previous year. Even in 2014, the Chinese could boast a sales record of 4.4 million units. While these are very optimistic results, the company is trying to be realistic about the future and says its main goal for next year is to sell 25 million smartphone units. However, one should be careful in assessments, which is associated with an ever-growing market that has become more saturated.
