Smartphone shipments in the third quarter place Chinese rising star Xiaomi ‘China’s Apple’ ahead of South Korea’s LG, but behind Samsung and Apple

This article is more than 5 years old

This article is more than 5 years old

Chinese manufacturer Xiaomi has leapfrogged Lenovo and LG to become the third-largest smartphone manufacturer in the world behind Samsung and Apple.



Xiaomi is commonly described as “China’s Apple” and founder Lei Jun as “the Chinese Steve Jobs”, yet the company is only four years old and did not release its own smartphone until 2011.

Research firms IDC and Strategy analytics both now place Xiaomi in overall third place for smartphone shipments in the third quarter of 2014, more than tripling shipments year-on-year overtaking South Korea’s LG by between 0.4m and 1.2m smartphones.

‘Star performer’

“Xiaomi was the star performer in the quarter, capturing a record 6% marketshare and rising into third place in the global smartphone rankings for the first time ever,” said Neil Mawston, executive director of Strategy Analytics.

“Xiaomi’s Android smartphone models are wildly popular in the Chinese market and it shifts millions of them every quarter through its extensive online and operator channels.”

“Xiaomi’s next step is to target the international market in Asia and Europe, where it may face stronger headwinds of low brand awareness and technology-patent challenges next year,” explained Mawston.

Xiaomi shipped 17.3m smartphones in the third quarter, 5.3% of the 327.6m total global shipments, according to data from IDC. In the same period, Samsung shipped 78.1m smartphones and Apple 39.3m, while Lenovo shipped 16.9m and LG 16.8m, which IDC describes as a tie due to the variability in the data.

Strategy Analytics places Samsung first with 79.2m smartphones, Apple in second with 39.3m, Xiaomi in third with 18m and LG in fourth 16.8m out of a total 320.4m smartphones sold in the third quarter.

‘Still room to compete’

“Xiaomi, Lenovo, and LG Electronics – all posted market-beating growth and with markedly different strategies,” said Ramon Llamas from IDC’s mobile phone research group. “This shows that there is still room to compete in this market, whether it be in the low end as Lenovo has done, at the high end where Xiaomi competes, or in both as LG Electronics has shown.”

Shipments of smartphones are slowing to single-digit growth in developed markets, such as the UK and US, where smartphone penetration is reaching around 80%. The majority of smartphone sales in the UK are customers replacing an existing smartphone rather than picking one up for the first time.

However, global smartphone shipments are still increasing thanks to developing markets such as India and China, which are still growing at 30% collectively according to IDC’s data.

‘Challenge has now become how to make money’

“In these markets, smartphone price points are making mobile computing possible where we once expected feature phones to remain dominant.” explained Ryan Reith, program director of IDC’s Worldwide Quarterly Mobile Phone Tracker.

“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.”

Samsung announced its lowest quarterly profit in more than three years due to poor performance from its smartphone division despite being the world’s largest smartphone manufacturer. Samsung Mobile is the company’s biggest business, but it has seen stiff competition from Apple, LG, HTC and Sony at the high end and Chinese manufacturers at the low end.

Xiaomi has found success in China, but its expansion into markets outside its home country has seen issues around privacy.

India recently warned its military not to use the Chinese smartphones over fears of data snooping, which prompted Xiaomi to state that it never collects user data without permission and to set up an Indian data centre.

The company has also begun moving non-Chinese data out of Beijing and onto data centres run by Amazon.

The Chinese smartphone company has also faced criticism with a reputation for copying the designs of other companies. Apple’s chief designer Jony Ive recently hit out at Xiaomi’s alleged copying dismissing suggestions of flattery saying “I think it is really straightforward. It is theft and it is lazy. I don’t think it is OK at all.”

But Xiaomi has made efforts to be more appealing to the west, hiring key executives from Google, including the outspoken Brazilian vice president of Android Hugo Barra, who became Xiaomi’s head of international sales.

Xiaomi has announced plans to expand this year to more than a dozen fast growing markets, including Malaysia, Indonesia, India Thailand, Russia, Turkey, Brazil and Mexico.

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