LONDON -- Samsung is still the world's biggest smartphone maker in the world by a distance, but its reign is under pressure as the company is expected to record its first-ever sales decline in 2015.
According to new figures released by research company TrendForce, Samsung is on course to record its first drop in smartphone shipments since it began selling these devices. "Samsung has lost much of its shares in the low-end to mid-range markets to Chinese competitors. TrendForce therefore anticipates that the vendor will see its first ever decline of annual smartphone shipments in 2015, with a 1 percent year-on-year drop and around 323.5 million units shipped," analyst Avril Wu said.
One of the reasons for this yearly drop is the worse-than-expected performance of the company's flagship devices, including the Galaxy S6 and Galaxy S6 Edge+. TrendForce previously predicted annual shipments of the Galaxy S range to be around 45 million, but it has now revised that figure downwards by more than 10 percent to 40 million units. A recent guidance note from Samsung predicted an 80 percent jump in profits in the third quarter of 2015, but rather than being the result of increased smartphone sales, it is the result of a weaker South Korean won.
Samsung's decline is a reflection of an overall slowdown in growth of the smartphone market, with Wu saying that with the global economy projected to decelerate in the second half of 2015, smartphone shipments are expected to remain weak until the middle of 2016. The smartphone market is set to grow by just 9.3 percent in 2015, down from 26.5 percent in 2014, and it is predicted to slow down further to 7.7 percent in 2016.
Besides facing a huge challenge at the mid-to-low end of the market from a growing number of Chinese manufacturers, Samsung is struggling to compete with the world's most valuable company -- Apple Inc. -- at the premium end of the market. The launch of the iPhone 6S and iPhone 6S Plus will have a direct impact on Samsung's sales, with TrendForce's analysts saying the new smartphones have "captivated consumers with its 3D Touch technology and rose gold exterior."
While Samsung is expected to record its first drop in overall shipments in 2015, Apple is likely to see a growth of 16 percent with about 223.7 million iPhones shipped by the end of the year.
As CounterPoint's second-quarter figures showed, Chinese manufacturers are beginning to dominate the global smartphone landscape. According to TrendForce, smartphones made in China will account for 45 percent of all smartphones shipped in the third quarter of 2015. Leading that charge is Huawei, the world's third-biggest smartphone maker, which has become the first Chinese brand to ship 100 million smartphones in a single year with shipments expected to grow 40 percent year-on-year.
TrendForce said Huawei's smartphone performance in the third quarter was much above expectations with the company looking to move away from its budget background to challenge major players like Apple and Samsung. To do this, it launched its Mate S smartphone in September. That phone includes a feature called Force Touch, which is a rival technology to Apple’s 3D Touch.
But it's not all good news for Chinese manufacturers, with figures from TrendForce showing that Xiaomi will miss its stated target of 100 million units in 2015. Xiaomi will, however, see a growth of around 14.6 percent because of contributions from its more affordable devices like the Redmi and Mi 4c.